The following balance sheets were prepared for Adam Corporation and Best Company on January 1,...
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Accounting
The following balance sheets were prepared for Adam Corporation and Best Company on January 1, 20X2, just before they entered into a business combination:
| Adam Corporation | Best Company | |||
|---|---|---|---|---|
| Item | Book Value | Fair Market Value | Book Value | Fair Market Value |
| Assets | ||||
| Cash & Receivables | $153,000 | $153,000 | $95,000 | $95,000 |
| Inventory | 301,000 | 397,000 | 83,000 | 165,000 |
| Buildings & Equipment | 601,000 | 439,000 | 262,000 | 247,000 |
| Less: Accumulated Depreciation | (240,000) | (70,000) | ||
| Total Assets | $815,000 | $989,000 | $370,000 | $507,000 |
| Liabilities & Equities Accounts | ||||
|---|---|---|---|---|
| Accounts Payable | $63,000 | $63,000 | $33,000 | $33,000 |
| Notes Payable | 193,000 | 208,000 | 30,000 | 35,000 |
| Common Stock: | ||||
| $8 par value | 179,000 | |||
| $6 par value | 84,000 | |||
| Additional Paid-In Capital | 124,000 | 35,000 | ||
| Retained Earnings | 256,000 | 188,000 | ||
| Total Liabilities & Equities | $815,000 | $370,000 |
Adam acquired all of Best Company's assets and liabilities on January 1, 20X2, in exchange for its common shares.
Adam issued 8,700 shares of stock to complete the business combination.
Required:
Prepare a balance sheet of the combined company, immediately following the acquisition, assuming Adam's shares were trading at $60 each.
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