Advanced Accounting 5th ed ch2 solutions(2)

Cash

Receivables Inventories

Plant and Equipment (net) ($3,840,000 + $720,000) Goodwill Total Assets

Liabilities

Common Stock, $16 par ($3,440,000 + (.50 $800,000)) Other Contributed Capital ($400,000 + $800,000) Retained Earnings Total Equities

$680,000 720,000 2,240,000 4,560,000 1,520,000 3,840,000 1,200,000

Cash 200,000 Receivables 240,000 Inventory 240,000 Plant and Equipment 720,000 Goodwill * 120,000 Liabilities 320,000

400,000 Common Stock (25,000 $16)

800,000 Other Contributed Capital ($48 - $16) 25,000

* ($48 25,000) – [($1,480,000 – ($800,000 – $720,000) – $320,000]

= $1,200,000 – [$1,480,000 – $80,000 – $320,000] = $1,200,000 – $1,080,000 = $120,000

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