Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

Exercise 11

Alternate consideration, bargain. Kiln Corporation is considering the acquisition of Williams Incorporated. Kiln has asked you, its accountant, to evaluate the various offers it might make to Williams Incorporated. The December 31, 2011, balance sheet of Williams is as follows:
Record the acquisition entry for Kiln Corporation that would result under each of the alternative offers. Value analysis is suggested.
1. Kiln Corporation issues 20,000 of its $10 par common stock with a fair value of $25 per share for the net assets of Williams Incorporated.
2. Kiln Corporation pays $385,000 in cash.