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Patel Company issued 106,200 shares of $1 par value common stock (market value of $6/share) for...

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Exercise 2-12A Patel Company issued 106,200 shares of $1 par value common stock market value of $6/share) for the net assets

Patel Company issued 106,200 shares of $1 par value common stock (market value of $6/share) for the net assets of Seely Company on January 1, 2014, in a statutory merger. Seely Company had the following assets, liabilities, and owners’ equity at that time: Book Value Tax Basis Fair Value Difference Cash $21,450 $21,450 $—0— Accounts receivable 110,180 110,180 —0— Inventory (LIFO) 81,660 134,850 53,190 Land 29,630 55,170 25,540 Plant assets (net) 359,900 428,940 69,040 Total assets $602,820 $750,590 Allowance for uncollectible accounts $9,640 $9,640 $—0— Accounts payable 53,490 53,490 —0— Bonds payable 190,700 172,310 (18,390) Common stock, $1 par value 73,430 Other contributed capital 121,190 Retained earnings 154,370 Total equities $602,820 Prepare the journal entry to record the assets acquired and liabilities assumed. Assume an income tax rate of 30%.

Exercise 2-12A Patel Company issued 106,200 shares of $1 par value common stock market value of $6/share) for the net assets of Seely Company on January 1, 2014, in a statutory merger. Seely Company had the following assets, liabilities, and owners' equity at that time: Cash Accounts receivable Inventory (LIFO) Land Plant assets (net) Total assets Book Value Tax Basis $21,450 110,180 81,660 29,630 359,900 $602,820 Fair Value $21,450 110,180 134,850 55,170 428,940 $750,590 Difference $-0- -0- 53,190 25,540 69,040 $9,640 53,490 172,310 $-0- -0- (18,390) Allowance for uncollectible accounts Accounts payable Bonds payable Common stock, $1 par value Other contributed capital Retained earnings Total equities $9,640 53,490 190,700 73,430 121,190 154,370 $602,820 Prepare the journal entry to record the assets acquired and liabilities assumed. Assume an income tax rate of 30%. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

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Naming convention is not available, can be slightly different per question format. Solution: Debit Credit 21450 110180 134850

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