Acadia Corporation created Skinny Company as a subsidiary and transferred assets worth $150,000 and $17,000 in accounts payable to Skinny in exchange for 5,000 shares of its common stock. Skinny recorded the transfer with debits to the assets and credits to common stock, additional paid-in capital, and accounts payable.
Acadia Corporation created Skinny Company as a wholly owned subsidia.docx
1. Acadia Corporation created Skinny Company as a wholly owned
subsidiary by transferring assets and accounts payable to Skinny
in exchange for its common stock. Skinny recorded the
following entry when it received the assets and accounts
payable:
DebitCredit
Cash5,000
Accounts Receivable 20,000
Inventory30,000
Land5,000
Buildings90,000
Equipment40,000
Accounts Payable17,000
Accumulated Depreciation- Buidlings31,000
Accumulated Depreciation - Equipment15,000
Common Stock50,000
Additional Paid in Capital77,0000
Required:
What was Acadia’s book value of the total assets (not net
assets) transferred to Skinny Company?
What amount did Acadia report as its investment in Skinny after
the transfer?
What number of shares of $10 par value stock did Skinny issue
to Acadia?
What impact did the transfer of assets and accounts payable
have on the amount reported by Acadia as total assets?
What impact did the transfer of assets and accounts payable
have on the amount that Acadia and the consolid