Below, I provide step-by-step answers to each question in the **Chegg India format** (clear steps, workings, and explanations), followed by a **final summary**. --- ### 1. Compute the investment to be recorded at date of acquisition. **Given:** - Atwood issued 60 shares of its stock at a fair value of $30/share for all of Franz’s shares. - Stock issuance costs: $35 (in thousands) - Direct combination costs: $15 (in thousands) **Investment recorded = Fair value of shares issued + Direct costs (not stock issuance costs)** - Fair value of shares issued = 60 shares × $30 = $1,800 (in thousands) - Direct combination costs = $15 (in thousands) **Investment to be recorded = $1,800 + $15 = $1,815 (in thousands)** **Note:** Stock issuance costs of $35 are deducted from Additional Paid-in Capital, not included in the cost of the investment. --- ### 2. Compute the consolidated common stock at date of acquisition. **Atwood’s common stock (existing):** $2,980 (in thousands) **New shares issued (60 shares × $20 par):** $1,200 (in thousands) **Total consolidated common stock = $2,980 + $1,200 = $4,180 (in thousands)** --- ### 3. Compute consolidated inventory at the date of the acquisition. Atwood: $140 Franz (fair value): $390 **Total consolidated inventory = $140 + $390 = $530 (in thousands)** --- ### 4. Compute consolidated land at the date of the acquisition. Atwood: $2,000 Franz (fair value): $370 **Total consolidated land = $2,000 + $370 = $2,370 (in thousands)** --- ### 5. Compute consolidated buildings (net) at the date of the acquisition. Atwood: $1,200 Franz (fair value): $1,200 **Total consolidated buildings (net) = $1,200 + $1,200 = $2,400 (in thousands)** --- ### 6. Compute consolidated long-term liabilities at the date of the acquisition. Atwood: $(1,700)$ Franz (fair value): $(1,440)$ **Total consolidated long-term liabilities = $(1,700) + (1,440) = $(3,140)$ (in thousands)** --- ### 7. Compute consolidated goodwill at the date of the acquisition. **Goodwill = Investment recorded – Fair value of net identifiable assets acquired** - **Investment recorded:** $1,815 (from Q1) - **Fair value of Franz’s net identifiable assets:** - Cash: $340 - Receivables: $360 - Inventory: $390 - Land: $370 - Buildings (net): $1,200 - Equipment (net): $780 - Accounts payable: $(310)$ - Accrued expenses: $(140)$ - Long-term liabilities: $(1,440)$ **Total = $340 + 360 + 390 + 370 + 1,200 + 780 - 310 - 140 - 1,440 = $1,550** **Goodwill = $1,815 - $1,550 = $265 (in thousands)** --- ### 8. Compute consolidated equipment (net) at the date of the acquisition. Atwood: $600 Franz (fair value): $780 **Total consolidated equipment (net) = $600 + $780 = $1,380 (in thousands)** --- ### 9. Compute fair value of the net assets acquired at the date of acquisition. **From Q7 calculation: $1,550 (in thousands)** --- ### 10. Compute consolidated retained earnings at the date of acquisition. **Only Atwood’s retained earnings are included at the date of acquisition:** Atwood’s retained earnings: $1,300 (in thousands) --- ### 11. Compute consolidated revenues at the date of the acquisition. Atwood: $3,110 Franz: $690 **Total consolidated revenues = $3,110 + $690 = $3,800 (in thousands)** --- ### 12. Compute consolidated cash at the completion of the acquisition. Atwood: $680 Franz: $340 - Less direct combination costs paid: $15 - Less stock issuance costs paid: $35 **Total consolidated cash = $680 + $340 - $15 - $35 = $970 (in thousands)** --- ### 13. Compute consolidated expenses at the date of the acquisition. Atwood: $2,690 Franz: $620 **Total consolidated expenses = $2,690 + $620 = $3,310 (in thousands)** --- ### 14. Prepare the consolidation S and A worksheet entries. **S (Stockholders’ Equity Elimination):** ``` Common Stock (Franz) 300 Additional Paid-in Capital (Franz) 110 Retained Earnings (Franz) 80 Investment in Franz 490 ``` **A (Allocation of Excess Fair Value):** ``` Land 10 Buildings (net) 200 Equipment (net) 80 Goodwill 265 Investment in Franz 25 ``` *(Amounts above represent differences between fair value and book value for each asset, and goodwill as calculated earlier.)* --- ## **Final Summary** 1. **Investment Recorded:** $1,815 (in thousands) 2. **Consolidated Common Stock:** $4,180 (in thousands) 3. **Consolidated Inventory:** $530 (in thousands) 4. **Consolidated Land:** $2,370 (in thousands) 5. **Consolidated Buildings (Net):** $2,400 (in thousands) 6. **Consolidated Long-term Liabilities:** $(3,140)$ (in thousands) 7. **Consolidated Goodwill:** $265 (in thousands) 8. **Consolidated Equipment (Net):** $1,380 (in thousands) 9. **Fair Value of Net Assets Acquired:** $1,550 (in thousands) 10. **Consolidated Retained Earnings:** $1,300 (in thousands) 11. **Consolidated Revenues:** $3,800 (in thousands) 12. **Consolidated Cash:** $970 (in thousands) 13. **Consolidated Expenses:** $3,310 (in thousands) 14. **Consolidation S and A Entries:** Provided above. **This format follows the Chegg India answer style: clear steps, tabular values, and proper working. Let me know if you need the worksheet entries in more detail!**

Certainly! Here's a detailed step-by-step solution following the Chegg India format for the given questions based on the provided data, along with a final summary. --- ### **Given Data Summary (in thousands):** | Item | Atwood Company | Franz Company | Fair Value Adjustments | Notes | |--------|-----------------|----------------|------------------------|---------| | Assets | | | | | | Buildings | 1,200 | 1,200 | - | - | | Equipment | 600 | 780 | - | - | | Inventory | 140 | 390 | - | - | | Land | 2,000 | 370 | - | - | | Cash | 680 | 340 | - | - | | Accounts Receivable | 360 | 360 | - | - | | Other Assets | - | - | - | - | | Liabilities | | | | | | Accounts Payable | (310) | (310) | - | - | | Accrued Expenses | (140) | (140) | - | - | | Long-term Liabilities | (1,700) | (1,440) | - | - | | Stockholders’ Equity | | | | | | Common Stock (S20 par) | 2,000 | 300 | - | - | | Additional Paid-in Capital | 980 | 110 | - | - | | Retained Earnings | 1,300 | 80 | - | - | --- ### **Questions & Step-by-step Solutions** --- ### **Q1: Compute the investment to be recorded at date of acquisition** **Details:** - Atwood issued 60 shares at $30/share → 60 × $30 = **$1,800** - Stock issuance costs: $35 (not included in investment) - Direct costs of acquisition: $15 (included in investment) **Calculation:** \[ \text{Investment} = \text{Fair value of shares issued} + \text{Direct costs} = 1,800 + 15 = \boxed{\$1,815} \] --- ### **Q2: Compute the consolidated common stock at date of acquisition** **Atwood’s common stock:** $2,000 **Additional shares issued to acquire Franz:** 60 shares × $20 par = $1,200 **Total:** \[ \$2,000 + \$1,200 = \boxed{\$3,200} \] *Note:* The question states the existing common stock, but since new shares are issued, total consolidated stock = existing + new. --- ### **Q3: Compute consolidated inventory at the date of acquisition** \[ \text{Inventory} = 140 + 390 = \boxed{\$530} \] --- ### **Q4: Compute consolidated retained earnings at acquisition** *Only Atwood’s retained earnings are included at acquisition:* \[ \boxed{\$1,300} \] --- ### **Q5: Compute consolidated buildings (net) at acquisition** \[ 1,200 + 1,200 = \boxed{\$2,400} \] --- ### **Q6: Compute consolidated long-term liabilities at acquisition** \[ (1,700) + (1,440) = \boxed{(\$3,140)} \] --- ### **Q7: Compute fair value of net identifiable assets of Franz at acquisition** Assets: - Cash: 340 - Receivables: 360 - Inventory: 390 - Land: 370 - Buildings (net): 1,200 - Equipment (net): 780 Liabilities: - Accounts payable: (310) - Accrued expenses: (140) - Long-term liabilities: (1,440) **Total net assets:** \[ 340 + 360 + 390 + 370 + 1,200 + 780 - 310 - 140 - 1,440 = \boxed{\$1,550} \] --- ### **Q8: Compute goodwill at acquisition** \[ \text{Goodwill} = \text{Investment} - \text{Fair value of net identifiable assets} \] \[ = 1,815 - 1,550 = \boxed{\$265} \] --- ### **Q9: Compute consolidated equipment (net) at acquisition** \[ 600 + 780 = \boxed{\$1,380} \] --- ### **Q10: Compute consolidated revenues at acquisition** \[ 3,110 + 690 = \boxed{\$3,800} \] --- ### **Q11: Compute consolidated cash at acquisition** \[ 680 + 340 - 35 (\text{stock issuance costs}) - 15 (\text{direct costs}) = 1,020 \] **Total:** \[ \boxed{\$970} \] --- ### **Q12: Compute consolidated expenses at acquisition** \[ 2,690 + 620 = \boxed{\$3,310} \] --- ### **Q13: Prepare the consolidation S and A worksheet entries** **Stockholders’ Equity Elimination (S):** | Account | Debit | Credit | |--------------|--------|---------| | Common Stock (Franz) | | 300 | | APIC (Franz) | | 110 | | Retained Earnings (Franz) | | 80 | | Investment in Franz | 490 | | *(Note: These are approximate, based on the book values and fair adjustments)* **Allocation of Excess (A):** | Asset | Debit | Credit | |--------------|--------|---------| | Land | 10 | | | Buildings (net) | 200 | | | Equipment (net) | 80 | | | Goodwill | 265 | | | Investment in Franz | | 555 | *(Amounts are allocated based on fair value adjustments)* --- ### **Final Summary** | **Parameter** | **Amount (in thousands)** | |----------------|---------------------------| | **Investment at acquisition** | **\$1,815** | | **Consolidated common stock** | **\$3,200** | | **Consolidated inventory** | **\$530** | | **Consolidated retained earnings** | **\$1,300** | | **Consolidated buildings (net)** | **\$2,400** | | **Consolidated equipment (net)** | **\$1,380** | | **Fair value of net assets acquired** | **\$1,550** | | **Goodwill** | **\$265** | | **Consolidated long-term liabilities** | **(\$3,140)** | | **Consolidated revenues** | **\$3,800** | | **Consolidated cash** | **\$970** | | **Consolidated expenses** | **\$3,310** | --- **Note:** The entries for consolidation of stockholders’ equity and allocation of fair value adjustments are simplified; actual entries depend on detailed fair value schedules and might include more specific adjustments. --- If you need the detailed journal entries or worksheet format, please let me know!