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Acc 4303 Exam I

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2012 EXAM #1 Ch 1, 2, 3

ACC 4303

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ACADEMIC HONESTY: I have If there is evidence to the ronJntl"!:llri,

Signed: ____~~~---=----~--------------~

or notes allowed 4 function calculators are allowed
PROBLEM 1
[20 ptsJ

Seven Company acquires 100% of the NET ASSETS OF Orbea Company by issuing 16,000 shares of $1 0 par common stock with a market value of $230,000. Information about Orbea's net assets is given below: - Orbea Company I 1~o o)( )0 ::: J(_p (}1() 0 () Balance Sheet J; Book Value Fair Value Cash $ 20,000 $ 20,000 \

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Accounts Receivable Machinery, net Equipment, net Total Assets

50,000 39,000 96.000

45,000 55,000 120.000 $240 000

Accounts Payable Common Stock, $1 par Retained Earnings Total Liabilities and Equities

$ 15,000

REQUIRED: PREPARE Seven's journal entry for its acquisition of Orbea's NET e:Ts. Document your support work.
Bonus [2 pts]: If the market value of Seven's common stock had been acquisition of Orbea's NET ASSETS. Document your support work. ')lf(l..

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