Journal Entries to Record a Business Combination for Frost
Not what you're looking for?
On January 1, 20X2, Frost Company acquired all of TKK Corporation's assets and liabilities by issuing 24,000 shares of its $4 par value common stock. At that date, Frost shares were selling at $22 per share.
Historical cost and fair value balance sheet data for TKK at the time of acquisition were as follows:
Balance Sheet Item Historical Cost Fair Value
Cash and Receivables $ 28,000 $ 28,000
Inventory 94,000 122,000
Buildings and Equipment 600,000 470,000
Less: Accumulated Depreciation (240,000)
Total Assets $482,000 $620,000
Accounts Payable $ 41,000 $ 41,000
Notes Payable 65,000 63,000
Common Stock ($10 par value) 160,000
Retained Earnings 216,000
Total Liabilities and Equities $482,000
Frost paid legal fees for the transfer of assets and liabilities of $14,000, audit fees of $21,000, and listing
application fees for the new shares of $7,000.
Prepare the journal entries made by Frost to record the business combination.
Purchase this Solution
Solution Summary
Word document attached takes given financial data and prepares that journal entry to record business combinations.
Education
- BA, Ain Shams University, Cairo Egypt
- MBA, California State University, Sacramento
Recent Feedback
- "ty i have more need help with"
- "ty i have jmore i need help with"
- "great help"
- "excellent help"
- "Very helpful and easy to understand."
Purchase this Solution
Free BrainMass Quizzes
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.