See attached for Balance Sheets
In preparation for a possible business combination, a team of experts from Boogie Musical made a thorough examination and audit of Toot-Toot Tuba. They found that Toot-Toot's assets and liabilities were correctly stated except that they estimated uncollectible accounts at $1,400. The experts also estimated the market value of the inventory at $35,000 and the market value of the plant and equipment at $500,000. The business combination took place on January 1, 20X6, and on that date Boogie Musical acquired all the assets and liabilities of Toot-Toot Tuba. On that date, Boogie's common stock was selling for $55 per share.
Record the combination on Boogie's book assuming that Boogie issued 9,000 o9f its $10 par common shares in exchange for Toot-Toot's assets and liabilities.
First of all, those findings from audit mean that total Tuba's assets = 347,000 + (35,000 - ...
The solution examines advance and business combination accounting.