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The Financial Balances for the Atwood Company and the Franz

question 80

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The financial balances for the Atwood Company and the Franz Company as of December 31, 2013, are presented below. Also included are the fair values for Franz Company's net assets.  Atwood  Franz Co  Franz Co.  (all numbers are in thousands)   Book Value  Book Value  Fair Value  Cash $870$240$240 Receivables 660600600 Inventory 1,230420580 Land 1,800260250 Buildings (net)  1,800540650 Equipment (net)  660380400 Accounts payable (570) (240) (240)  Accrued expenses (270) (60) (60)  Long-term liabilities (2,700) (1,020) (1,120)  Common stock ($20 par)  (1,980)  Common stock ($5 par)  (420)  Additional paid-in capital (210) (180)  Retained earnings (1,170) (480)  Revenues (2,880) (660)  Expenses 2,760620\begin{array}{lrcr}&\text { Atwood } & \text { Franz Co } & \text { Franz Co. }\\&&\text { (all numbers are in thousands) }\\&\text { Book Value }&\text { Book Value }&\text { Fair Value }\\\text { Cash } & \$ 870 & \mathbf{\$ 2 4 0} & \mathbf{\$ 2 4 0} \\\text { Receivables } & 660 & 600 & 600 \\\text { Inventory } & 1,230 & 420 & 580 \\\text { Land } & 1,800 & 260 & 250 \\\text { Buildings (net) } & 1,800 & 540 & 650\\\text { Equipment (net) } & 660 & 380 & 400 \\\text { Accounts payable } & (570) & (240) & (240) \\\text { Accrued expenses } & (270) & (60) & (60) \\\text { Long-term liabilities } & (2,700) & (1,020) & (1,120) \\\text { Common stock }(\$ 20 \text { par) } & (1,980) & &\\\text { Common stock (\$5 par) } & & (420) \\\text { Additional paid-in capital } & (210) & (180) \\\text { Retained earnings } & (1,170) & (480) \\\text { Revenues } & (2,880) & (660) \\\text { Expenses } & 2,760 & 620\end{array} Note: Parenthesis indicate a credit balance Assume an acquisition business combination took place at December 31, 2013. Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid.
Compute fair value of the net assets acquired at the date of the acquisition.


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