The financial statement amounts for the Atwood Company and the Franz Company as of December 31, 2021, are presented below. Also included are the fair values for Franz Company's net assets (all numbers are in thousands).
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The financial statement amounts for the Atwood Company and the Franz Company as of December 31, 2021, are presented below. Also included are the fair values for Franz Company's net assets (all numbers are in thousands).
Atwood | Franz Co. | Franz Co. | |||||||||
Book Value | Book Value | Fair Value | |||||||||
12/31/2021 | 12/31/2021 | 12/31/2021 | |||||||||
Cash | $ | 870 | $ | 240 | $ | 240 | |||||
Receivables | 660 | 600 | 600 | ||||||||
Inventory | 1,230 | 420 | 580 | ||||||||
Land | 1,800 | 260 | 250 | ||||||||
Buildings (net) | 1,800 | 540 | 650 | ||||||||
Equipment (net) | 660 | 380 | 400 | ||||||||
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 1/1/18 | (1,170 | ) | (480 | ) | |||||||
Revenues | (2,880 | ) | (660 | ) | |||||||
Expenses | 2,760 | 620 | |||||||||
Note: Parenthesis indicate a credit balance
Assume an acquisition business combination took place at December 31, 2021. 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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- The condensed financial statements of Carla Vista Co. for the years 2021 and 2022 are presented below. CARLA VISTA CO.Balance SheetsDecember 31 (in thousands)20222021Current assets Cash and cash equivalents$330$360 Accounts receivable (net)590520 Inventory640570 Prepaid expenses130160 Total current assets1,6901,610Property, plant, and equipment (net)410380Investments130130Intangibles and other assets530510 Total assets$2,760$2,630Current liabilities$940$910Long-term liabilities660560Stockholders’ equity—common1,1601,160 Total liabilities and stockholders’ equity$2,760$2,630 CARLA VISTA CO.Income StatementsFor the Year Ended December 31 (in thousands)20222021Sales revenue$3,980$3,640Costs and expenses Cost of goods sold1,0901,010 Selling & administrative expenses2,4002,330 Interest expense1020 Total costs and expenses3,5003,360Income before income taxes480280Income tax expense192112Net income$ 288$ 168 Compute the following ratios for 2022 and 2021.…The financial statement amounts for the Atwood Company and the Franz Company as of December 31, 2021, are presented below. Also included are the fair values for Franz Company's net assets (all numbers are in thousands). Atwood Franz co. Franz Co. Particular Book Value Book Value fair Value 12/31/2021 12/31/2021 12/31/2021 Cash 870 240 240 Receivables 660 600 600 Inventory 1,230 420 580 Land 1,800 260 250 Buildings (net) 1,800 540 650 Equipment (net) 660 380 400 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 1/1/18 (1,170 (480 Revenues (2,880 (660 Expenses 2,760 620 Note: Parenthesis indicates a credit balance. Assume an acquisition business combination took place on December 31, 2021. Atwood issued 50 shares of its common stock with a fair value of $35 per…The financial statement amounts for the Atwood Company and the Franz Company as of December 31, 2021, are presented below. Also included are the fair values for Franz Company's net assets (all numbers are in thousands). Atwood Franz Co. Franz Co. Book Value Book Value Fair Value 12/31/2021 12/31/2021 12/31/2021 Cash $ 870 $ 240 $ 240 Receivables 660 600 600 Inventory 1,230 420 580 Land 1,800 260 250 Buildings (net) 1,800 540 650 Equipment (net) 660 380 400 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 1/1/18 (1,170 ) (480 ) Revenues (2,880 ) (660 )…
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