Reference no: EM132471816

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