On January 1, 2020, Pinnacle Corporation exchanged $3,817,000 cash for 100 percent of the outstanding voting stock of St
Posted: Sun Jun 05, 2022 5:30 pm
On January 1, 2020, Pinnacle Corporation exchanged $3,817,000
cash for 100 percent of the outstanding voting stock of Strata
Corporation. On the acquisition date, Strata had the following
balance sheet:
Pinnacle prepared the following fair-value allocation:
At the acquisition date, Strata’s buildings had a 10-year
remaining life and its licensing agreements were due to expire in 5
years. On December 31, 2021, Strata’s accounts payable included an
$104,800 current liability owed to Pinnacle. Strata Corporation
continues its separate legal existence as a wholly owned subsidiary
of Pinnacle with independent accounting records. Pinnacle employs
the initial value method in its internal accounting for its
investment in Strata.
The separate financial statements for the two companies for the
year ending December 31, 2021, follow. Credit balances are
indicated by parentheses.
cash for 100 percent of the outstanding voting stock of Strata
Corporation. On the acquisition date, Strata had the following
balance sheet:
Pinnacle prepared the following fair-value allocation:
At the acquisition date, Strata’s buildings had a 10-year
remaining life and its licensing agreements were due to expire in 5
years. On December 31, 2021, Strata’s accounts payable included an
$104,800 current liability owed to Pinnacle. Strata Corporation
continues its separate legal existence as a wholly owned subsidiary
of Pinnacle with independent accounting records. Pinnacle employs
the initial value method in its internal accounting for its
investment in Strata.
The separate financial statements for the two companies for the
year ending December 31, 2021, follow. Credit balances are
indicated by parentheses.