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What is the journal entry to record these fees

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Reference no: EM131299803

ABC Corporation acquired ZYX Company's net assets on March 1, 2016. ABC Corporation paid $158,000. The balance sheet and fair value information for ZYX Company immediately before the acquisition is shown below.

1) Prepare the acquisition journal entry for ABC Corporation.

2) Prepare the acquisition journal entry for ZYX Company.

3) Prepare the acquisition journal entry for ABC Corporation assuming it acquired all of ZYX's common stock for $158,000.

4) Assume that ABC Corporation incurred $25,000 in legal fees related to the acquisition. What is the journal entry to record these fees?

5) In your own words, explain some of the reasons ABC Corporation may have decided to acquire ZYX Company. (200 words or less)

          ZYX Company
Balance Sheet Data:

Book Value
Fair Value
Cash



      30,000
      30,000
Accounts Receivable

      25,000
      25,000
Inventory


      25,000
      40,000
Patents



      35,000
      45,000
Buildings and Equipment

    215,000
      95,000
Less: Accum. Depreciation
  (150,000)
 
Total Assets


    180,000
    235,000
 





 
Accounts Payable


      35,000
      35,000
Notes Payable


    100,000
    100,000
Common Stock:




 
$10 par value


      15,000
 
Additional Paid-In Capital

        5,000
 
Retained Earnings

      25,000
 
Total Liabilities and Equities
    180,000
 

Reference no: EM131299803

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