On January 1, Chester. inc. acquires 100% of Festus 100,000 shares of Chester's Si par value common cash. Chester also incurred direct combination co Festus Corp.'s outstanding common stock by issuing mmon voting stock. In addition, Chester paid $1,800,000 in on costs of $350,000 and stock issuance costs of $650,000. On January 1, Chester's voting common stock common shares were selling for $12.50 per share. Fes acquisition are listed below. had a market value of $38.50 per share. Festus' voting per share. Festus' balances on the acquisition date, just prior to Cash Receivables Inventory Land Building (net) Equipment (net) Payables Common Stock, $1 par value Paid-In Capital RE(January 1) BV. $ 530,000 $ 610,000 400,000 600,000 500,000 375,000 (280,000) (1,800,000) (660,000) (275,000) F. V. 530,000 650,000 400,000 700,000 580,000 300,000 (280,000) (2,250,000) Required: A. Using the Acquisition Method, compute the value of Chester's investment account on the date of acquisition, January 1.

Miko willingly admits that she is not an accountant by training. she is concerned that her balance sheet might not be correct. she has provided you with the following additional information. 1. the boat actually belongs to miko, not to skysong, inc.. however, because she thinks she might take customers out on the boat occasionally, she decided to list it as an asset of the company. to be consistent, she also listed as a liability of the corporation her personal loan that she took out at the bank to buy the boat. 2. the inventory was originally purchased for $27,500, but due to a surge in demand miko now thinks she could sell it for $39,600. she thought it would be best to record it at $39,600. 3. included in the accounts receivable balance is $11,000 that miko loaned to her brother 5 years ago. miko included this in the receivables of skysong, inc. so she wouldn’t forget that her brother owes her money. (b) provide a corrected balance sheet for skysong, inc.. (hint: to get the balance sheet to balance, adjust stockholders’ equity.) (list assets in order of liquidity.)