Presented below are the balance sheets of Allen Corporation and Benson Corporation, immediately prior to a business combination. The fair values of Benson's net assets equal their book values, and there are no previously unreported identifiable intangible assets.

Required
a. Prepare the acquisition entry and the balance sheet of Allen Corporation after each of the following business combinations:
(1) Allen acquires Benson for $300,000 cash in a transaction recorded as a statutory merger.
(2) Allen acquires Benson for $300,000 cash in a transaction recorded as a stock acquisition.
(3) Allen acquires the noncash net assets of Benson for $250,000 cash.
b. Why are Allen's total assets in part a (2), the stock acquisition, different from the total assets in part a (l)and part a (3)?
c. Prepare the balance sheet of Benson after the asset acquisition transaction in part a(3).

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Allen Corp. Benson Corp. 400,000 600,000 1,200,000 $50,000 150,000 400,000 $600,000 Cash.. Other current assets...ARRN $100,000 250,000 100,000 50,000 100,000 $600,000 ...$300,000 Long-term liabilities 600,000 200,000 300,000 800,000 Retained earnings. Total liabilities and equity$2,200,000