On May 1, Soriano Company reported the following account balances along with their estimated fair values: Items Carrying Amount Fair Value Receivables Inventory Copyrights $ 90,000 75,000 125,000 $ 90,000 75,000 480,000 Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and equities 825,000 $ 1,115,000 $ 160,000 645,000 100,000 210,000 $ 1,115,000 700,000 $ 1,345,000 $ 160,000 635,000 ° Ө On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $100,000 to an Investment banking firm. The following Information was also available: • Zambrano further agreed to pay an extra $70,000 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,000. • Soriano has a research and development project in process with an appraised value of $200,000. However, the project has not yet reached technological feasibility, and the project's assets have no alternative future use. Required: a. and b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $700,000 and (b) $800,000. Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account field. View transaction list Journal entry worksheet 2 3 4 Record the expenses related to the combination. Assume its initial cash payment to the former owners was $700,000. Note: Enter debits before credits. Transaction 2 General Journal Debit Credit

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter8: Liabilities And Stockholders' Equity

Section: Chapter Questions

Problem 8.1.2MBA

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Is there a way to add more than one image? I have tried, but when I do, I get a red circle with a red line, and I cannot add more. Is there a way to add more images, somehow? Also, when I type in this box and hit "Enter," it submits my question instead of going to the next space below where I am typing. Is there a way to fix this? Sorry, but third - Where are the expenses in this question? I see assets, liabilities, common stock, and retained earnings, but not expenses. Am I not seeing it? What are the expenses? I am confused. :( Please help me, and explain clearly and succinctly. Thank you so much. :)