P42 Prepare balance sheet after an acquisition ‘On January 2, 2011, Pet Corporation enters into a business combination with Sea Corporation in which Sea is dissolved. Pet pays $1,650,000 for Sea, the consideration consisting of 66,000 shares of Pet $10 par common stock with a market value of $25 per share. In addition, Pet pays the following expenses in ‘cash at the time of the merger: Finders’ fee $70,000 Accounting and legal fees 130,000 Registration and issuance costs of securities 80,000 Balance sheet and fair value information for the two companies on December 31, 2010, immediately before the merger, is as follows (in thousands): Pet Book Value Sea Book Value Cash $300 $60 “Accounts receivable—net 460 100 Inventories 1,040 160 Land x00 200 Buildings—net 2,000 400 Equipment—net 1.000 oo Total assets $5,600 $1,520 “Accounts payable S00 380 Note payable 1,200 400 Capital stock, $10 par oo 00 Other paid-in capital 1200 Retained earnings L000 ‘otal liabilities and owners’ equity $5,600 REQUIRED: Prepare a balance sheet for Pet Corporation as of January 2, 2011, immediately after the merger, assuming the merger is treated as an acquisitionp32 ‘Allocation schedule for fair value/book value differential and consolidated balance ‘sheet at acquisition ‘Par Corporation acquired 70 percent ofthe outstanding common sock of Set Corporation on Janay 1, 2011 for $350000 cash. rmediaely afer this accuistion the balance shet information forthe two compares was as foo in thon) sa arta Vane “Hoar cao sn $40 sao Sitio 2 3 3 — 2 3 2 py a ° & angen FA ‘S is 2 ‘3 % =m i 2 Ss Fala ia = = etnies cn Seer Ey nena $0 so so Soman ” ic ° Otte 0p 10a = Sanetering ary = Teques ie mB ‘An Introduction to Consolidated Financial Statements 6 REQUIRED, 1 Prepare a schedule allocate the ieence between the ai ae of he neste in Se andthe book ‘ite ofthe tees to eit and emia et ss 2. Prepare consid Balance ses fr Pat Corporation an Susi tamu 1.201Poa ‘alate toms hatmay appear consliated statements to year after acquisition Re Cipae asud 8 pcetl de nen eck of Sk Cra SO 0 cao Suny 201 on ch ae Se ke’ atoms of pel kf SUM nd ‘em arng eS, “Tce we canes in te ost ok ee croton ie 2011 an 2012 ‘AvDecmbor 012i ial hance of Poa le fas oan nt ad Sai “Be See ait cry 1. Ales met a ier ee ne of es ge a a a2 2 Tiere feo ae 2012 cae ems pee SRD ‘REQUIRED: Deas: ent hal pp i ans of he Capon ‘Si Sinun bauer Sune ae a ee Stace 1 Coan id cmp Deca A contact 1 crate ecm Deemer 2002 5 icant 10 Neng et Deb 012