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.