Bower Company purchased Lark Corporation’s net assets on January 3, 20X2, for $632,000 cash. In addition,...
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Bower Company purchased Lark Corporation’s net assets on January 3, 20X2, for $632,000 cash. In addition, Bower incurred $9,000 of direct costs in consummating the combination. At the time of acquisition, Lark reported the following historical cost and current market data: |
| Balance Sheet Item | Book Value | Fair Value | ||||
| Assets | ||||||
| Cash & Receivables | $ | 57,000 | $ | 57,000 | ||
| Inventory | 114,000 | 165,000 | ||||
| Buildings & Equipment (net) | 207,000 | 307,000 | ||||
| Patent | — | 203,000 | ||||
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| Total Assets | $ | 378,000 | $ | 732,000 | ||
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| Liabilities & Equities | ||||||
| Accounts Payable | $ | 20,000 | $ | 20,000 | ||
| Common Stock | 98,000 | |||||
| Additional Paid-In Capital | 66,000 | |||||
| Retained Earnings | 194,000 | |||||
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| Total Liabilities & Equities | $ | 378,000 | ||||
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| Required: |
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Prepare the journal entry or entries with which Bower recorded its acquisition of Lark’s net assets. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
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Bower Company purchased Lark Corporation’s net assets on January 3, 20X2, for $632,000 cash. In addition,...
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