Schenk Corporation's balance sheet immediately prior to its acquisition by Piaget Company is as follows:
In addition to the assets already reported by Schenk, previously unreported identifiable intangible assets valued at $12,000,000 are identified as owned by Schenk Corporation. These assets are appropriately recorded by Piaget as assets.
Piaget Company issues 200,000 shares of new $1 par common stock with a market value of $80/share to acquire Schenk's assets and liabilities. Stock registration fees are $350,000 and costs for the services of outside accountants and lawyers are $400,000, both paid in cash.
Required a. Prepare Piaget's entry to record the acquisition.
b. Now assume Piaget Company issues 50,000 shares of $1 par common stock with a market value of $80/share to acquire Schenk's assets and liabilities. Registration fees for the stock issue are $150,000 and out of pocket costs for the services of outside accountants and lawyers are $200,000, both paid in cash. The terms of the merger include an earnings contingency. Piaget Company estimates the expected present value of the payout on the earnings contingency to be $300,000. Prepare Piaget's entry to record the acquisition.

Question

Schenk Corporation's balance sheet immediately prior to its acquisition by Piaget Company is as follows:
  In addition to the assets already reported by Schenk, previously unreported identifiable intangible assets valued at $12,000,000 are identified as owned by Schenk Corporation. These assets are appropriately recorded by Piaget as assets.
Piaget Company issues 200,000 shares of new $1 par common stock with a market value of $80/share to acquire Schenk's assets and liabilities. Stock registration fees are $350,000 and costs for the services of outside accountants and lawyers are $400,000, both paid in cash.
Required a. Prepare Piaget's entry to record the acquisition.
b. Now assume Piaget Company issues 50,000 shares of $1 par common stock with a market value of $80/share to acquire Schenk's assets and liabilities. Registration fees for the stock issue are $150,000 and out of pocket costs for the services of outside accountants and lawyers are $200,000, both paid in cash. The terms of the merger include an earnings contingency. Piaget Company estimates the expected present value of the payout on the earnings contingency to be $300,000. Prepare Piaget's entry to record the acquisition.

Quizplus · Accepted Answer

The Answer of Schenk Corporation's balance sheet immediately prior to its acquisition by Piaget Company is as follows:
  In addition to the assets already reported by Schenk, previously unreported identifiable intangible assets valued at $12,000,000 are identified as owned by Schenk Corporation. These assets are appropriately recorded by Piaget as assets.
Piaget Company issues 200,000 shares of new $1 par common stock with a market value of $80/share to acquire Schenk's assets and liabilities. Stock registration fees are $350,000 and costs for the services of outside accountants and lawyers are $400,000, both paid in cash.
Required a. Prepare Piaget's entry to record the acquisition.
b. Now assume Piaget Company issues 50,000 shares of $1 par common stock with a market value of $80/share to acquire Schenk's assets and liabilities. Registration fees for the stock issue are $150,000 and out of pocket costs for the services of outside accountants and lawyers are $200,000, both paid in cash. The terms of the merger include an earnings contingency. Piaget Company estimates the expected present value of the payout on the earnings contingency to be $300,000. Prepare Piaget's entry to record the acquisition.

Schenk Corporation's Balance Sheet Immediately Prior to Its Acquisition by Piaget