Question;Business Combination with GoodwillMorton Co. paid cash of $ 178,000 to acquire Zink Company?s net assets on February 1, 2013. The balance sheet data for the two companies and fair value information for Zink immediately before the business combination were:Morton Corporation Zink CompanyBalance Sheet Item Book Value Book Value Fair ValueCash $ 240,000 $ 20,000 $ 20,000Accounts Receivable 140,000 35,000 35,000Inventory 170,000 30,000 50,000Patents 80,000 40,000 60,000Buildings & Equipment 380,000 310,000 150,000Less: Accumulated Depreciation (190,000) (200,000)Total Assets $ 820,000 $235,000 $315,000Accounts Payable $ 85,000 $ 55,000 $ 55,000Notes Payable 150,000 120,000 120,000Common Stock$ 10 par value 200,000$ 6 par value 18,000Additional Paid-In Capital 160,000 10,000Retained Earnings 225,000 32,000Total Liabilities and Equities $ 820,000 $235,000Required:a. Give the journal entry anchored by Morton Corporation when it acquired Zink?s net assets.b. Prepare a balance sheet for Morton immediately following the acquisition.c. Give the journal entry to be recorded by Morton if it acquires all of Zink?s common stock (instead of Zink?s net assets) for $178,000.
Paper#41137 | Written in 18-Jul-2015Price : $21