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Grabber Industries purchased the net assets of Easy Company for $1,300,000, comprised of $1,200,000 of cash and a contingent performance condition of $100,000. A schedule of the net assets of Easy Company, as recorded on Easy Companys books at the time of the acquisition, is as follows: Assets Cash Receivables Inventory Land, buildings, and equipment (net) Total assets S 31,000 250,000 302,000 350.000 Liabilities Current liabilities Long-term debt Total liabilities Net assets (book value) S 90,000 185,000 S 658,000 The following schedule shows the differences between the recorded costs and market values of the assets of Easy Company at the date of the acquisition: Book Values S302,000 350,000 Fair Values $400,000 390,000 Inventory Land, buildings, & equipment Patents Purchased in-process research & development Licensing agreements Totals Liabilities 40,000 300,000 90,000 $652,000 $275,000 $1220,000 Prepare the journal entry to record this acquisition using the acquisition method prescribed by SFAS 141R, Business Combinations. ANS:
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Cheng Excel HOME INSERT PAGE LAYOLUT FORMULAS DATA REVIE EW cut Copy . Honmat Painter alib:ri General Normal Bad Hll Calculation Check Cell Insert Delete hormat SortHind & Filtrr〒 Select Fommatti ing Tahle Aignmert Eanrg 612 1 Particulars Book Valua Fair Value Journal Entry Assets 3 Cash 4 Receivables 5 Inventory 6 land, Ruilding and Fquipmet 350,00.0390,0.0 To consider fair valu as availahle 31,000.00 250,000.0D 00,000.00 390,000.00 00,000.00 9D,00a.00 111,000.00 31,DC0.00 To consider book value always 50,000.0 250,c0.0 To consider book value as fair valu 302,000.00 400,0.00 To consider fair value as available e not available Inventory Land, Building and Equipment Purchased in proress R Licensirng agreeients rsearch and D Total Assets (A) 9 Current Liebilities 9 Lon-term debt 10 Total Liabilities (B) 11 Nat Assats (C-A-B) 12 Add 933,000.00 1,071,000.00 90,000.00 To consider book value as fair velue not availeble e not available 185,000.0 185,000.00 To consider book value as fair valu 275,000,00 275,000.00 658,000.00 796,000.00 Current Liabilities Long term dobt 0.000.Do 185,000.00 1,200,000.00 100,00a.00 ntingent Consideration Purchased in process 13 Research and Developement 4 Licensing 5 Fair Valus of Nat Assats Note: Patents are not considered as specified urider the standard. 300,000.00 To consider fair value as available 90,000.00 To consider fair valuc as avaiable 1,575,000.00 1,575,000.00 Consideration transferred1,300,00.00 D 20 Nocontrolling Interest 21 Fair Value of Net Assets 1,186,D00.0DF Sheet1 | Q21020 Q19| Q18 Q17 | Q16 | Q15 014 | 013 012 | 011 | 010 09 08 0710610 : A +100 1221 AM 1/18/2019

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