On December 31, 20X6, the Statements of Financial Position of the Power

question 33

Essay

On December 31, 20X6, the statements of financial position of the Power Company and the Pro Company are as follows: (in 000s)
$\begin{array}{lll}&\text { Power } & \text { Pro } & \text { (FV) }\\\text { Cash } & \$ 500 & \$ 800 \\\text { Accounts receivable } & 1,500 & 1,700 \\\text { Inventories } & 2,000 & 1,500 \\\text { Property, plant, and equipment (net) } & \underline{2,500} & \underline{4,000}&\$4,300 \\\text { Total assets } &\underline{ \$ 6,500 }& \underline{\$ 8,000}\end{array}$ $$\begin{array} { l l l } \text { Current liabilities } & \$ 700 & \$ 400 \\\text { Long-term liabilities } & 8 0 0 & 500 \\\text { Common shares } & 2,500 & 1,000 \\\text { Contributed surplus } & 8 0 0 & 1,500 \\\text { Retained earnings } & \underline { 1,700 } & \underline { 4,600 } \\\text { Total liabilities and equities } & \underline { \$6 , 500 }& \underline { \$ 18,000}\end{array}$$ Power Company has 100,000 shares of common stock outstanding. Pro Company has 45,000 shares outstanding. On January 1, 20X7, Power issued an additional 90,000 shares of common stock in exchange for all the outstanding shares of Pro. All assets and liabilities have book values equal to fair values, except as noted above. In addition, Pro has a patent that has an appraised fair value of $450.
Market value of the new shares issued was $95 per share at the date of acquisition.
$$\text {Required: }$$ What is the amount of goodwill to be recorded for this business combination? Prepare the journal entry that Power would record on January 1, 20X7, related to this acquisition. Prepare the consolidated statement of financial position at January 1, 20X7.

Understand the historical development and significance of various forms of writing and communication media.

Recognize the impact of communication technologies on society and human interaction.

Identify the theoretical perspectives related to media studies and their implications.

Understand the role of mass media in shaping public opinion and society.

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Definitions:

Cerebrovascular Accident

A medical term for a stroke, a condition where the blood supply to a part of the brain is interrupted or reduced, causing brain cells to die.

Abbreviation

A condensed version of a word or phrase designed to make communication easier.

Herniated Disk Syndrome

A condition where the cushion-like pads between the vertebrae move out of position and press on adjacent nerves, causing pain.

Abbreviation

A brief version of a word or phrase designed for simplicity.