Question 1: A1, A3, B1, C1, C3 On Dec 31, 2019, Jalal Corporation acquired all the net assets of Salma Corporation directly from the owner for $300,000 cash, in a business combination. Jalal paid legal fees of $50,000 in connection with the combination. Salma's Balance sheet prior to the business combination shows the following:
Question 1: A1, A3, B1, C1, C3 On Dec 31, 2019, Jalal Corporation acquired all the net assets of Salma Corporation directly from the owner for $300,000 cash, in a business combination. Jalal paid legal fees of $50,000 in connection with the combination. Salma's Balance sheet prior to the business combination shows the following:
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
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![Question 1:
A1, A3, B1, C1, C3
On Dec 31, 2019, Jalal Corporation acquired all the net assets of
Salma Corporation directly from the owner for $300,000 cash,
in a business combination. Jalal paid legal fees of $50,000 in
connection with the combination.
Salma's Balance sheet prior to the business combination shows
the following:
Current assets
Plant assets (net)
Intangible assets (net)
Total Assets
Current liabilities
Long-term debt
Total liabilities
Assets
Salma Company (Combine)
Balance Sheet (prior to business combination)
December 31,2019
Carrying
Amounts
stock,
$ 20,000
200,000
70,000
$ 290,000
Liabilities and Stockholder's Equity
$ 50,000
100,000
$ 150,000
$1
Common
100,000
equity
Total liabilities and
290,000
Total
S
par
Current Fair
Values
$ 40,000
230,000
90,000
S 360,000
$ 50,000
130,000
$ 180,000
40,000
stockhoders'equity
S
stockholders'
Instruction: Prepare journal entries on December 31, 2019, for
Jalal Corporation to record the business combination with Salma
Company.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15d4bd5a-5aec-4226-8111-77bf996698a8%2F252b901e-b909-422d-a159-490dfe956994%2Fj1oj5up_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 1:
A1, A3, B1, C1, C3
On Dec 31, 2019, Jalal Corporation acquired all the net assets of
Salma Corporation directly from the owner for $300,000 cash,
in a business combination. Jalal paid legal fees of $50,000 in
connection with the combination.
Salma's Balance sheet prior to the business combination shows
the following:
Current assets
Plant assets (net)
Intangible assets (net)
Total Assets
Current liabilities
Long-term debt
Total liabilities
Assets
Salma Company (Combine)
Balance Sheet (prior to business combination)
December 31,2019
Carrying
Amounts
stock,
$ 20,000
200,000
70,000
$ 290,000
Liabilities and Stockholder's Equity
$ 50,000
100,000
$ 150,000
$1
Common
100,000
equity
Total liabilities and
290,000
Total
S
par
Current Fair
Values
$ 40,000
230,000
90,000
S 360,000
$ 50,000
130,000
$ 180,000
40,000
stockhoders'equity
S
stockholders'
Instruction: Prepare journal entries on December 31, 2019, for
Jalal Corporation to record the business combination with Salma
Company.
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