Comprehensive On 5/1/06, Patco acquired all of the outstanding common stock of Satco. Infor-mation about Satco as of the acquisition date follows:
Additional information:
(1) As consideration, Patco issued 20,000 shares of its $1 par value common stock, which had a market value of $19 per share.
(2) Patco incurred $75,000 of direct out-of-pocket costs, $35,000 of which pertained to the registration with the Securities and Exchange Commission of the common stock issued.
(3) Patco has elected to use non-push down accounting,
Required:
a. Prepare the entry or entries to record the combination.
b. Prepare a conceptual analysis of the Investment account as of 5/1/06.
c. Prepare the entries to prepare consolidated financial statements as of 5/1/06.

Question

Comprehensive On 5/1/06, Patco acquired all of the outstanding common stock of Satco. Infor-mation about Satco as of the acquisition date follows:
  Additional information:
(1) As consideration, Patco issued 20,000 shares of its $1 par value common stock, which had a market value of $19 per share.
(2) Patco incurred $75,000 of direct out-of-pocket costs, $35,000 of which pertained to the registration with the Securities and Exchange Commission of the common stock issued.
(3) Patco has elected to use non-push down accounting,
Required:
a. Prepare the entry or entries to record the combination.
b. Prepare a conceptual analysis of the Investment account as of 5/1/06.
c. Prepare the entries to prepare consolidated financial statements as of 5/1/06.

Quizplus · Accepted Answer

The Answer of Comprehensive On 5/1/06, Patco acquired all of the outstanding common stock of Satco. Infor-mation about Satco as of the acquisition date follows:
  Additional information:
(1) As consideration, Patco issued 20,000 shares of its $1 par value common stock, which had a market value of $19 per share.
(2) Patco incurred $75,000 of direct out-of-pocket costs, $35,000 of which pertained to the registration with the Securities and Exchange Commission of the common stock issued.
(3) Patco has elected to use non-push down accounting,
Required:
a. Prepare the entry or entries to record the combination.
b. Prepare a conceptual analysis of the Investment account as of 5/1/06.
c. Prepare the entries to prepare consolidated financial statements as of 5/1/06.

Comprehensive on 5/1/06, Patco Acquired All of the Outstanding Common