TUGAS PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2017

TUGAS LAB 2
BUSINESS COMBINATION

On January 2, 2020, USB Corporation issues 92,600 shares of its $19 par common share with market
value of $48.3 per share to acquire UBB Corporation and UBB Corporation is dissolved after this
acquisition. In addition, USB pays the following expenses in cash at the time of the merger:
• Accounting and legal fees $426,100
• Finders’ fee $203,500
• Registration and issuance costs of securities $199,700

Statement of Financial Position and fair value information for the two companies on December 31,
2020, immediately before acquisition, is as follows (in $000):
USB UBB
Book Value Book Value Fair Value
Cash 739 170.4 170.4
Account Receivable-net 1,155.8 265 215
Inventories 2,164 649.1 649.1
Land 2,309.2 689 816.2
Buildings-net 4,370 1,092 1,373.6
Equipment-net 3,456 1,630.98 1,630.98
Total Assets 14,194 4,496.18 4,855.28
Account Payable 1,638 264.2 264.2
Bonds Payable 2,966 1,234 879.3
Capital Stock, $19 par 5,078 1,377
Additional paid-in capital 2,401 735.4
Retained Earnings 2,111 885.58
Total liabilities and owners’ equity 14,194 4,496.18

Instruction:
1. Prepare all necessary journal entries for the acquisition including:
a. To record investment in UBB
b. To record other investment cost
c. To record allocation of the cost acquiring UBB Corporation to identifiable net asset
according to their fair value and to goodwill or gain on bargaining purchase.
d. Prepare a Statement of Financial Position for USB Corporation as of January 2, 2020,
immediately after the acquisition!

DINI – JOSEPHINE – LUMONGGA FATA 2017