Acc450 Advanced Accounting: P2-19 Following are preacquisition financial balances for Padre Company

Acc450 Advanced Accounting
P2-19 The Acquisition Method
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts.
Padre Company Sol Company Book Values
Book Values Fair Values Dec 31 Dec 31 Dec 31
Cash 400,000 120,000 120,000
Receivables 220,000 300,000 300,000
Inventory 410,000 210,000 260,000
Land 600,000 130,000 110,000
Buildings and equipment (net) 600,000 270,000 330,000
Franchise agreements 220,000 190,000 220,000
Accounts payable (300,000) (120,000) (120,000)
Accrued expenses (90,000) (30,000) (30,000)
Long-term liabilities (900,000) (510,000) (510,000)
Common stock—$20 par value (660,000)
Common stock—$5 par value (210,000)
Additional paid-in capital (70,000) (90,000)
Retained earnings, 1/1 (390,000) (240,000)
Revenues (960,000) (330,000) Expenses 920,000 310,000

Note: Parentheses indicate a credit balance.
On December 31, Padre acquires Sol’s outstanding stock by paying $360,000 in cash and issuing 10,000 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $20,000 as well as $5,000 in stock issuance costs.

Determine the value that would be shown in Padre and Sol’s consolidated financial statements for each of the accounts listed. (Input all amounts as positive values.) Accounts Inventory Land Buildings and equipment Franchise agreements Goodwill Revenues Additional paid-in capital Expenses Retained earnings, 1/1
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