Pool Industries paid $540,000 to purchase 75% of the outstanding stock of Swimmin Corporation, on December 31, 2011.Any excess fair value over the identified assets and liabilities is attributed to goodwill.The following year-end information was available just before the purchase:
Using the data provided above, assume that Pool decided rather than paying $540,000 cash, Pool issued 10,000 shares of their own stock to the owners of Swimmin.At the time of issue, the $10 par value stock had a market value of $60 per share.
Required: Prepare Pool's consolidated balance sheet on December 31, 2011.
Definitions:
Economic Life
The estimated period over which an asset is expected to be productive or useful in generating revenue.
Patent Rights
Legal protections granted to inventors or assignees, giving them exclusive rights to use and commercialize their inventions for a certain period.
Double-Declining-Balance
A method of accelerated depreciation where an asset loses value at double the rate of its straight-line depreciation.
Units-Of-Activity
A method for allocating depreciation based on the actual usage, work, or units of production of the asset, rather than passage of time.
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