ADIBATUL ISNA / 3.41.18.1.

01

AK-3A
P 1-4
Allocation Schedule and Balance Sheet

The balance sheets of Pub Corporation and Sun Corporation at December 31, 2010, are summarized
with fair value information as follows (in thousands) :

Pub Corporation Sun Corporation

Assets Book Value Fair Value Book Value Fair Value
Cash
Receivable-Net $115 $115 $10 $10
Inventories $40 $40 $20 $20
Land $120 $150 $50 $30
Buildings-Net $45 $100 $30 $100
Equipment-Net $200 $300 $100 $150
Total Assets $180 $245 $90 $150
$700 $950 $300 $460
Equities
Account Payable $90 $90 $30 $130
Other Liabilities $100 $90 $60 $35
Capital stock, $10 par $300 $100
Other paid-in capital $100 $80
Retained earnings $110 $30
Total equities $700 $300

On January 1, 2011, Pub Corporation acquired all of Sun's outstanding stock for $300.000.
Pub paid $100.000 cash and issued a five-year, 12 percent note for the balance. Sun was dissolved
Required
1. Prepare a schedule to show how the investment cost is allocated to identifiable assets
and liabilities.
2. Prepare a balance sheet for Pub Corporation on January 1,2011, immediately after acquisition.
 ADIBATUL ISNA / 3.41.18.1.01
1. Skedul Perhitungan
2. Jurnal
3. Kertas Kerja
4. Neraca Sesaat Setelah Penggabungan Usaha

ANSWER :
1. Schedule

Investment cost (fair value) $ 300,000

Fair value acquired from Sun ($460.000 - $165.000) $ 295,000
Good will $ 5,000

2. Journal

Pub Corporation
Journal Entries
as at January 1,2011

Account Name Debet Credit

01Investment in Sun $ 300,000
01Note Payable $ 200,000
01Cash $ 100,000

01Cash $ 10,000
01Receivables-net $ 20,000
01Inventories $ 30,000
01Land $ 100,000
01Buildings-net $ 150,000
01Equipment-net $ 150,000
01Good will $ 5,000
01Accounts Payable $ 130,000
01Other liabilities $ 35,000
01Investment in Sun $ 300,000

Ammount $ 765,000 $ 765,000

 ADIBATUL ISNA / 3.41.18.1.01
3. Worksheet
Pub Corporation
Worksheet
as at January 1,2011

Account Name Pub Corp Debet Credit Combination

01Cash $ 115,000 $ 10,000 $ 100,000 $ 25,000
01Receivables-net $ 40,000 $ 20,000 $ 60,000
01Investment $ - $ 300,000 $ 300,000 $ -
01Inventories $ 120,000 $ 30,000 $ 150,000
01Land $ 45,000 $ 100,000 $ 145,000
01Buildings-net $ 200,000 $ 150,000 $ 350,000
01Equipment-net $ 180,000 $ 150,000 $ 330,000
01Good will $ - $ 5,000 $ 5,000
$ 700,000 $ 1,065,000
01Accounts Payable $ 90,000 $ 130,000 $ 220,000
01Notes Payable $ - $ 200,000 $ 200,000
01Other liabilities $ 100,000 $ 35,000 $ 135,000
01Capital Stock, $ 10 par $ 300,000 $ 300,000
01Other paid-in capital $ 100,000 $ 100,000
01Retained earnings $ 110,000 $ 110,000
$ 700,000 $ 765,000 $ 765,000 $ 1,065,000

4. Balance Sheet
Pub Corporation
Balance Sheet for an Acquisition
as at January 1,2011

ASSETS LIABILITIES & EQUITY

01Cash $ 25,000 LIABILITIES
01Receivables-net $ 60,000 01Accounts Payable $ 220,000
01Inventories $ 150,000 01Notes Payable $ 200,000
01Land $ 145,000 01Other liabilities $ 135,000
01Buildings-net $ 350,000 TOTAL LIABILITIES $ 555,000
01Equipment-net $ 330,000 EQUITY
01Good will $ 5,000 01Capital Stock, $ 10 par $ 300,000
01Other paid-in capital $ 100,000
01Retained earnings $ 110,000
TOTAL EQUITY $ 510,000

TOTAL ASSETS $ 1,065,000 TOTAL LIABILITIES & EQUITY $ 1,065,000