EXERCISE 3-4 Purchase, Date of AcquisitionOn January 1, 2010, Peach Company issued 1,500 of its $20 par value common shares with afair value of $60 per share in exchange for the 2,000 outstanding common shares of SwartzCompany in a purchase transaction. Registration costs amounted to $1,700, paid in cash. Justprior to the acquisition, the balance sheets of the two companies were as follows:Peach Company Swartz CompanyCash $ 73,000 $ 13,000Accounts receivable (net) 95,000 19,000Inventory 58,000 25,000Plant and equipment (net) 95,000 43,000Land 26,000 22,000Total assets $347,000 $122,000Accounts payable $ 66,000 $ 18,000Notes payable 82,000 21,000Common stock, $20 par value 100,000 40,000Other contributed capital 60,000 24,000Retained earnings 39,000 19,000Total equities $347,000 $122,000Any difference between the book value of equity and the value implied by the purchase pricerelates to goodwill.A. Prepare the journal entry on Peach Company’s books to record the exchange of stock.B. Prepare a Computation and Allocation Schedule for the difference between book valueand value implied by the purchase price.C. Prepare a consolidated balance sheet at the date of acquisition.”
Question:EXERCISE 3-4 Purchase, Date of AcquisitionOn January 1, 2010, Peach Company issued 1,500 of its $20 par value common shares with afair value of $60 per share in exchange for the 2,000…
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