Reference no: EM132614991

On January 31, 2004, EDGET Corporation acquired for Br five hundred forty thousands (540,000) cash all the net assets except cash of HIBRET Company and paid Br 60,000 to a law firm for legal services in connection with the business combination.

The balance sheet of HIBRET Company on January 31, 2004 was as follows:-

HIBRET Company

Balance Sheet

January 31, 2004

Assets:

Liabilities and Shareholders' Equity

Cash ...............................................40,000

Liabilities...............................................620,000

Other Current Assets...............................................280,000

Common Stock...............................................250,000

Plant Assets (net)...............................................760,000

Retained Earning...............................................330,000

Intangible Assets ...............................................120,000

Total Assets ...............................................1,200,000

Total Liab. & SHEs...............................................1,200,000

The present value of HIBRET Company's liabilities on January 31, 2004 was Br 620,000, the current fair values of its non-cash assets were as follows on January 31, 2004:

Other current assets.....................................................................................300,000

Plant Assets.....................................................................................874,000

Intangible Assets.....................................................................................76,000

Required:

Question I. Identify the combinee and combinor Company respectively?

Question II. Determine Total acquisitions costs for combinor Corporation?

Question III. Determine CFV of Net asset of Combine Company?

Question IV. Compute the amount of Good Will?

Question V. Prepare journal entries for EDGET Corporation on January 31, 2004 to record the acquisition of net assets of HIBRET Company's except cash?