Acc407 Advanced Accounting: Week 1 Assignment (E16-8 and P1-27)

Acc407 Advanced Accounting Week 1 Assignment (E16-8 and P1-27) E16-8 Cash Distribution Plan Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows: ASSETS LIABILITIES AND EQUITIES Cash 40,000 Liabilites 50,000 Adams, Loan 10,000 Adams, Capital 55,000 Other Assets 200,000 Peters, Capital 75,000 Blake, Capital 70,000 Total Assets 250,000 Total Liabilities and Equities 250,000 Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business. Required Prepare a cash distribution plan for the APB Partnership. P1-27 Journal Entries to Record a Business Combination 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 this 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 & Receivables 28,000 28,000 Inventory 94,000 122,000 Buildings & Equipment 600,000 470,000 Less: Acc 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 Liab & Equities 482,000 Frost paid legal fees for the transfer of assets and liabilities of $14,000, audit fee of $21,000 and listing application fees for the new shares of $7,000. Required: Prepare the journal entries made by Frost to record the business combination.