Reference no: EM132481103

On January 1, 20X2, Prost Company acquired all of SKK Corporation's assets and liabilities by issuing 25,300 shares of its $6 par value common stock. At that date, Prost shares were selling at $24 per share. Historical cost and fair value balance sheet data for SKK at the time of acquisition were as follows:

Balance Sheet Item        Historical Cost             Fair Value

Cash & Receivables               $21,000              $21,000

Inventory                          99,000                  107,000

Buildings & Equipment           604,000                454,000

Less:

Accumulated Depreciation            (225,000)

Total Assets                    $499,000                    $582,000

Accounts Payable               $46,000                        $46,000

Notes Payable                    81,000                           79,000

Common Stock                 ($10 par value)                161,000

Retained Earnings                  211,000

Total Liabilities & Equities     $499,000

Prost paid legal fees for the transfer of assets and liabilities of $22,000. Prost also paid audit fees of $24,000 and listing application fees of $12,000, both related to the issuance of new shares.

Required:

Question 1: Record the payment of legal fees

Question 2: Record the costs of issuing stock

Question 3: Record the purchase of SKK Corporation