11 samantha 39 s sporting goods had net assets consisting of the following book valu 4307694

11 samantha 39 s sporting goods had net assets consisting of the following book valu 4307694

11) Samantha's Sporting Goods had net assets consisting of the following:

Book ValueFair Value

Cash150,000 150,000

Inventory820,000 960,000

Building and Fixtures330,000 310,000

Liabilities(90,000)(88,000)

Pedic Incorporated purchased Samantha's Sporting Goods, and immediately dissolved Samantha's as a separate legal entity.

Requirement 1: If Samantha's was purchased for $1,000,000 cash, prepare the entry recorded by Pedic.

Requirement 2: If Samantha's was purchased for $1,500,000 cash, prepare the entry recorded by Pedic.

12) On January 2, 2010 Carolina Clothing issued 100,000 new shares of its $5 par value common stock valued at $19 a share for all of Dakota Dressing Company's outstanding common shares in an acquisition. Carolina paid $15,000 for registering and issuing securities and $10,000 for other direct costs of the business combination. The fair value and book value of Dakota's identifiable assets and liabilities were the same. Assume Dakota Company is dissolved on the date of the acquisition. Summarized balance sheet information for both companies just before the acquisition on January 2, 2010 is as follows:

CarolinaDakota

Cash$150,000$120,000

Inventories320,000400,000

Other current assets500,000500,000

Land350,000250,000

Plant assets-net 4,000,000 1,500,000

Total Assets$5,320,000$2,770,00

Accounts payable$1,000,000$300,000

Notes payable1,300,000660,000

Capital stock, $5 par2,000,000500,000

Additional paid-in capital1,000,000100,000

Retained Earnings       20,000     1,210,000

Total Liabilities & Equities$5,320,000$2,770,000

Required:

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