On 5/1/06, Patco acquired all of the assets and assumed all of the liabilities of Satco. Information 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.
Required:
a. Prepare the entry or entries to record the combination under a decentralized accounting system.
b. Prepare the entries to prepare combined financial statements as of 5/1/06.

Question

On 5/1/06, Patco acquired all of the assets and assumed all of the liabilities of Satco. Information 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.
Required:
a. Prepare the entry or entries to record the combination under a decentralized accounting system.
b. Prepare the entries to prepare combined financial statements as of 5/1/06.

Quizplus · Accepted Answer

The Answer of On 5/1/06, Patco acquired all of the assets and assumed all of the liabilities of Satco. Information 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.
Required:
a. Prepare the entry or entries to record the combination under a decentralized accounting system.
b. Prepare the entries to prepare combined financial statements as of 5/1/06.

On 5/1/06, Patco Acquired All of the Assets and Assumed