Calculate the consolidated balance


On January 1, 2011, Primer Company issued 1,500 of its $20 par value common shares with a fair value of $50 per share in exchange for 2,000 outstanding common shares of Swartz Company in a purchase transaction. Registration costs amounted to $1,700 paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows:
Primer
Swartz
Cash
$ 73,000
$13,000
Accounts Receivable (net)
95,000
19,000
Inventory
58,000
25,000
Plant and Equipment (net)
95,000
43,000
Land
26,000
20,000
Total Assets
$ 347,000
$ 120,000
Accounts Payable
$ 66,000
16,000
Notes Payable
82,000
21,000
Common Stock, $20 par value
100,000
40,000
Other Contributed Capital
60,000
24,000
Retained Earnings
39,000
19,000
Total Liabilities and Equities
$ 347,000
$ 120,000
Any differences between the book value of equity and the value implied by the purchase price relates to Land.
Required:
A. Prepare the journal entry on Primer's books to record the exchange of stock.
B. Prepare a Computation and Allocation Schedule for the Difference between book value and value implied by the purchase price.
C. Calculate the consolidated balance for each of the following accounts as of December 31, 2011:
1. Cash
2. Land
3. Common Stock
4. Other Contributed Capital

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Accounting Basics: Calculate the consolidated balance
Reference No:- TGS082040

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