【正文】 s identifiable assets and liabilities were the same. Assume Dakota Company is dissolved on the date of the acquisit。s was purchased for $1,500,000 cash, prepare the entry recorded by Pedic.Answer: Requirement 1:Cash* 150,000Inventory 960,000Building and Fixtures 310,000 Liabilities 88,000 Gain on Bargain Purchase 332,000 Cash* 1,000,000*Cash entries may be recorded net on single line entry.Requirement 2:Cash* 150,000Inventory 960,000Building and Fixtures 310,000Goodwill 168,000 Liabilities 88,000 Cash* 1,500,000*Cash entries may be recorded net on single line entry.Objective: LO4Difficulty: Moderate12) On January 2, 2010 Carolina Clothing issued 100,000 new shares of its $5 par value mon stock valued at $19 a share for all of Dakota Dressing Company39。s as a separate legal entity.Requirement 1: If Samantha39。s Sporting Goods had net assets consisting of the following: Book Value Fair ValueCash 150,000 150,000 Inventory 820,000 960,000 Building and Fixtures 330,000 310,000 Liabilities (90,000) (88,000)Pedic Incorporated purchased Samantha39。s balance sheet as of the date of acquisition. Then record the journal entry Pilates would record on their books to record the acquisition.Answer: Goodwill is calculated as follows:Purchase price $700,000Fair value of net assets:Cash $200,000Accounts Receivable 185,000Copyrights 400,000Patents 100,000Liabilities (180,000)Total (705,000)Fair value of net assets in excess of Purchase price: $(5,000)Because Pilates paid less than the fair value of the net assets, they are considered to have made a bargain purchase, and would thus record a Gain on Bargain Purchase in the amount of $5,000 at the time of acquisition.The following journal entry would be prepared:Cash 200,000Accounts receivable 185,000Copyrights 400,000Patents 100,000 Liabilities 180,000 Bargain purchase gain 5,000 Cash 700,000Objective: LO4Difficulty: Moderate10) Pali Corporation exchanges 200,000 shares of newly issued $10 par value mon stock with a fair market value of $40 per share for all the outstanding $5 par value mon stock of Shingle Incorporated, which continues on as a legal entity. Fair value approximated book value for all assets and liabilities of Shingle. Pali paid the following costs and expenses related to the business bination:Registering and issuing securities 19,000Accounting and legal fees 150,000Salaries of Pali39。s balance sheet as of the date of acquisition.Answer: Goodwill is calculated as follows:Purchase price $900,000Fair value of net assets:Cash $200,000Accounts Receivable 185,000Copyrights 400,000Patents 100,000Liabilities (180,000)Total (705,000)Purchase price in excess of fair value of net assets: $195,000Pilates would record $195,000 for Goodwill as a result of the acquisition.Objective: LO4Difficulty: Moderate9) On January 2, 2011, Pilates Inc. paid $700,000 for all of the outstanding mon stock of Spinning Company, and dissolved Spinning Company. The carrying values for Spinning Company39。 equity$2,650,000Note that Current Assets of $310,000 results from the two panies contributing $260,000 and $120,000, less the cash paid out during the acquisition process of $70,000. Retained Earnings of the parent is reduced for the Investment Expense incurred in the process of $50,000.Objective: LO4Difficulty: Moderate8) On January 2, 2011, Pilates Inc. paid $900,000 for all of the outstanding mon stock of Spinning Company, and dissolved Spinning Company. The carrying values for Spinning Company39。s shares, and Salisbury was dissolved. Palisade paid $20,000 to register and issue the new mon shares. It cost Palisade $50,000 in direct bination costs. Book values equal market values except that Salisbury39。s net assets:Accounts receivable 90,000Inventory 260,000Land 35,000Building 20,000Equipment 35,000Patent 20,000Goodwill 75,000Investment expense 15,000 Current liabilities 75,000 Longterm debt 80,000 Cash 395,000Objective: LO4Difficulty: Moderate7) The balance sheets of Palisade Company and Salisbury Corporation were as follows on December 31, 2010:PalisadeSalisburyCurrent Assets$260,000$120,000Equipmentnet440,000480,000Buildingsnet600,000200,000Land100,000200,000Total Assets$1,400,000$1,000,000Current Liabilities100,000120,000Common Stock, $5 par1,000,000400,000Additional paidin Capital100,000280,000Retained Earnings200,000200,000Total Liabilities and Stockholders39。s general journal entry for the cash purchase of Petit39。s balance sheet on January 2, 2011 was as follows:Accounts receivablenet $90,000 Current liabilities $75,000Inventory 220,000 Long term debt 80,000Land 30,000 Common stock ($1 par) 10,000Buildingnet 20,000 Addtl. paidin capital 215,000Equipmentnet 40,000 Retained earnings 20,000Total assets $400,000 Total liab. amp。s net assets.Answer: General journal entry for the purchase of Penny39。 equity $1,650,000Fair values agree with book values except for inventory, land, and equipment, which have fair values of $640,000, $140,000 and $230,000, respectively. Penny has customer contracts valued at $20,000.Required:Prepare Saveed39。s general journal entry for the acquisition of Sudina assuming that Sudina will dissolve as a separate legal entity.Answer: 1. General journal entry recorded by Palta for the acquisition of Sudina (Sudina survives as a separate legal entity):Investment in Sudina 960,000 Common stock 400,000 Additional paidin capital 560,000Investment expense 5,000Additional paidin capital 18,000 Cash 23,0002. General journal entry recorded by Palta for the acquisition of Sudina (Sudina dissolves as a separate legal entity):Cash 37,000Inventories 200,000Other current asset