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

Exercise 24

Reverse acquisition On January 1, 2012, the shareholders of Untraded Company request 6,000 Traded shares in exchange for all of their 5,000 shares. This is an exchange ratio of 1.2 to 1. The fair value of a share of Traded Company is $60. The acquisition occurs when the two companies have the following balance sheets:
1. Prepare an appropriate value analysis and a determination and distribution of excess schedule.
2. Complete a consolidated worksheet for Untraded Company and its subsidiary, Traded Company, as of January 1, 2012.