PROBLEM 14-9

BOOKS OF PETER INDUSTRIES

Cash 28,000.00
Accounts Receivable 258,000.00
Inventory 395,000.00
Long term Investments 175,000.00
Land 100,000.00
Rolling Stock 63,000.00
Palnt and Equipment 2,500,000.00
Patents 500,000.00
Special Licences 100,000.00
Discount on Equipment Trust Notes 5,000.00
Discount on Debentures 50,000.00
Goodwill 244,700.00
Allowance for Bad Debts
Current Payables
Mortgage Payables 6,500.00
Premium on Mortgage Payable 137,200.00
Equipment Trust Notes 500,000.00
Debenture Payable 20,000.00
Common Stock 100,000.00
Additional Paid in Capital 1,000,000.00
Cash 180,000.00
2,298,000.00
135,000.00

Purchase price 2,520,000.00

Direct acquisition cost 135,000.00
Acquicition cost 2,655,000.00
Less: Fair Value (net)
Total Assets 4,112,500.00
Total Liabilities (1,702,200.00) 2,410,300.00
Goodwill 244,700.00

Expenses 42,000.00
Cash 42,000.00
BOOKS OF HCC

Investment in Stock - Peter 2,520,000.00

Allowance for Bad Debts 6,500.00
Accumulated Depreciation 614,000.00
Current Payable 137,200.00
Mortgage Payable 500,000.00
Equipment Trust Notes 100,000.00
Debenture Payable 1,000,000.00
Discount on Bonds Payable
Cash
Account Receivable
Inventory
Long term Investment
Land
Rolling stock
Plant and Equipment
Patents
Special Licenses
Gain on Sales of Assets and Liabilities

Common Stock 7,500.00

Additional Paid in Capital 4,500.00
Treasury Stock
(P5 * 1500 shs.= P7,500)
(P12,000 - P7,500 = P4,500)

Common Stock 592,500.00

Additional Paid In Capital - Common 495,500.00
Additional Paid in Capital - Retirement of Preferred 22,000.00
Retained Earnings 1,410,000.00
Investment in Stock

Peter Industries Stock

P600,000 - P7,500 = P592,500
P500,000 - P500,000 - P4,500 = P495,500
P220,000 + P1,187,900 = P1,410,000
 40,000.00
28,000.00
258,000.00
381,000.00
150,000.00
55,000.00
130,000.00
2,425,000.00
125,000.00
95,800.00
1,189,900.00

12,000.00

2,520,000.00