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Combined balance sheet | P1-40 |

2:23 AM

 Advanced Financial Accounting 
Combined Balance Sheet Exercise-Answers

P1-40 combined balance sheet
Bilge Pumpworks and Seaworthy Rope Company agreed to merge on January 1, 20X3. On this date of the merger agreement, the companies reported the follow data: 
Bilge Pumpworks has 10,000 shares of its $20 par value stock outstanding. The market value of the shares are $300 and $50, respectively.
Required:
(a). Bilge issues 700 shares of stock in exchange for all of Seaworthy’s net asset. Prepare a balance sheet for the combined entity immediately following the merger.​
(b). Prepare the stockholder’s equity section of the combined company’s balance sheet, assuming Bilge acquires all of Seaworthy’s net assets by issuing:​
1. 1,100 shares of common
2. 1,800 shares of common
3. 3,000 shares of common


 
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