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1. On January 2, 2022, Bread Corporation issued 100,000 new shares of its $5 par value common stock valued at $19 a share for all of Dilan Corporation's outstanding common shares. Bread paid $15,000 to register and issue shares. Bread also paid $10,000 for the direct combination costs of the accountants. The fair value and book value of Dilan's identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2022, is as follows: Cash Inventories Other current assets Land Plant assets-net Total Assets Accounts payable Bread Dilan $ 150,000 320,000 $ 120,000 400,000 500,000 500,000 350,000 250,000 4,000,000 1,500,000 $5,320,000 $2,770,000 $1,000,000 $ 300,000 Notes payable 1,300,000 660,000 Capital stock, $5 par 2,000,000 500,000 Paid-in capital 1,000,000 100,000 Retained Earnings 20,000 1,210,000 Total Liabilities & Equities $5,320,000 $2,770,000 Required: 1. Prepare Bread's general journal entry for the acquisition of Dilan if Dilan survives as a separate legal entity.

1. On January 2, 2022, Bread Corporation issued 100,000 new shares of its $5 par value common stock valued at $19 a share for all of Dilan Corporation's outstanding common shares. Bread paid $15,000 to register and issue shares. Bread also paid $10,000 for the direct combination costs of the accountants. The fair value and book value of Dilan's identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2022, is as follows: Cash Inventories Other current assets Land Plant assets-net Total Assets Accounts payable Bread Dilan $ 150,000 320,000 $ 120,000 400,000 500,000 500,000 350,000 250,000 4,000,000 1,500,000 $5,320,000 $2,770,000 $1,000,000 $ 300,000 Notes payable 1,300,000 660,000 Capital stock, $5 par 2,000,000 500,000 Paid-in capital 1,000,000 100,000 Retained Earnings 20,000 1,210,000 Total Liabilities & Equities $5,320,000 $2,770,000 Required: 1. Prepare Bread's general journal entry for the acquisition of Dilan if Dilan survives as a separate legal entity.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 14RE
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1. On January 2, 2022, Bread Corporation issued 100,000 new shares of its $5 par value common stock valued at $19 a share for all of Dilan Corporation's outstanding common shares. Bread paid $15,000 to register and issue shares. Bread also paid $10,000 for the direct combination costs of the accountants. The fair value and book value of Dilan's identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2022, is as follows: Cash Inventories Other current assets Land Plant assets-net Total Assets Accounts payable Bread Dilan $ 150,000 320,000 $ 120,000 400,000 500,000 500,000 350,000 250,000 4,000,000 1,500,000 $5,320,000 $2,770,000 $1,000,000 $ 300,000 Notes payable 1,300,000 660,000 Capital stock, $5 par 2,000,000 500,000 Paid-in capital 1,000,000 100,000 Retained Earnings 20,000 1,210,000 Total Liabilities & Equities $5,320,000 $2,770,000 Required: 1. Prepare Bread's general journal entry for the acquisition of Dilan if Dilan survives as a separate legal entity.
Transcribed Image Text:1. On January 2, 2022, Bread Corporation issued 100,000 new shares of its $5 par value common stock valued at $19 a share for all of Dilan Corporation's outstanding common shares. Bread paid $15,000 to register and issue shares. Bread also paid $10,000 for the direct combination costs of the accountants. The fair value and book value of Dilan's identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2022, is as follows: Cash Inventories Other current assets Land Plant assets-net Total Assets Accounts payable Bread Dilan $ 150,000 320,000 $ 120,000 400,000 500,000 500,000 350,000 250,000 4,000,000 1,500,000 $5,320,000 $2,770,000 $1,000,000 $ 300,000 Notes payable 1,300,000 660,000 Capital stock, $5 par 2,000,000 500,000 Paid-in capital 1,000,000 100,000 Retained Earnings 20,000 1,210,000 Total Liabilities & Equities $5,320,000 $2,770,000 Required: 1. Prepare Bread's general journal entry for the acquisition of Dilan if Dilan survives as a separate legal entity.
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