On january 1, 2013, the stockholders of phillips and solina agreed to a consolidation. because fasbrequires that one party be recognized as the acquirer and the other as the acquiree, it was agreed that phillips wasacquiring solina. phillips agreed to issue 20,000 shares of its $10 par stock to acquire all the net assets of solinaat a time when the fair value of phillips’ common stock was $15 per share.

on the date of consolidation, the fair values of solina’s current assets and liabilities were equal to their bookvalues. the fair value of plant and equipment was, however, $150,000. phillips will incur $20,000 of direct acqui-sition costs and $6,000 in stock issue costs.

required: prepare the journal entries on the books of phillips to record the acquisition of solina company’s net assets.

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.