Alpha Company used debentures with a par valueof $660,000 to acquire 100% of Zeta, on January 1, 2013. On that date the fair value of the debentures issued was $644,000. The following balance sheet data were reported by Zeta at the point of the acquisition: Historical CostFair ValueCash and Receivabled80,00075,000Inventory145,000200,000Land75,00075,000Plant & Equipment450,000350,000Less: Accumulated Depreciation-170,000 Total Assets580,000700,000 Accounts Payable 50,000 50,000Common Stock100,000 Additional Paid i n Capital60,000 Retained Earnings370,000 Total Liabilities & Equity580,000 Prepare the entry to record the above transaction.

Answered: Image /qna-images/answer/f40ab27e-fb7a-48e0-b063-3ce2d659455b.jpg

Alpha Company used debentures with a par valueof $660,000 to acquire 100% of Zeta, on January 1, 2013. On that date the fair value of the debentures issued was $644,000. The following balance sheet data were reported by Zeta at the point of the acquisition: Historical Cost Fair Value Cash and Receivabled 80,000 75,000 Inventory 145,000 200,000 Land 75,000

Alpha Company used debentures with a par valueof $660,000 to acquire 100% of Zeta, on January 1, 2013. On that date the fair value of the debentures issued was $644,000. The following balance sheet data were reported by Zeta at the point of the acquisition: Historical Cost Fair Value Cash and Receivabled 80,000 75,000 Inventory 145,000 200,000 Land 75,000

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 55RSCQ

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	Historical Cost	Fair Value
Cash and Receivabled	80,000	75,000
Inventory	145,000	200,000
Land	75,000	75,000
Plant & Equipment	450,000	350,000
Less: Accumulated Depreciation	-170,000
Total Assets	580,000	700,000
Accounts Payable	50,000	50,000
Common Stock	100,000
Additional Paid i n Capital	60,000
Retained Earnings	370,000
Total Liabilities & Equity	580,000