Advanced Accounting

Myers Company Ltd. was formed 10 years ago by the issuance of 34,000 common shares to three shareholders. Four years later, thecompany went public and issued an additicnal 30,000 common shares. The management of Myers is considering a takeover in which Myers would purchase all of the assets and assume all of the liabilities ofMorris Inc. Two alternative proposals are being considered: PROPOSAL1Myers would offer to pay $446,400 cash for the Norris net assets. In addition, Myers would incur legal, appraisal, and finders' fees for atotal cost of $6,200. PROPOSAL 2Myers would issue 62,000 shares currently trading at $7.20 each for the Norris net assets. Other costs associated with the takeoverwould be as follows: Legal, appraisal, and finders® fees $ 6,200Costs of issuing shares 8,200 $14,400 Morris shareholders would be offered five seats on the 10-member board of directors of Myers, and the management of Norris wouldbe absorbed into the surviving company. Balance sheet data for the two companies prior to the combination are as follows: Myers NorrisCarrying Carrying FairAmount Amount ValueCash $ 552,880 % 64,500 % 64,508Accounts receivable 179,280 73,458 68,208Inventory 386,128 122,118 146,228Land 437,608 87,800 222,000Buildings (net) 262,585 33,820 356,828Equipment (net) 2@,945 29,785 27,945$1,987,77@ $489,785Current liabilities % 145,335 % 53,115 53,115Mon-current liabilities 468,808 162,808 167,808Common shares 512,000 112,808Retained earnings 850,435 82,678 21,967,770 2489,785 Proposal 1View transaction listJournal entry worksheetABRecord the acquisition of net assets in Norris Inc.Note: Enter debits before credits.TransactionGeneral JournalDebitCredit1Cash64,500Accounts receivable58,200Inventory146,220Land222,000Buildings36.020Goodwill101,630Non-current liabilities167,000Cash446,400Current liabilities25, 170Record entryClear entryView general journal Proposal 1 €3 Answer is not complete.Accounts receivable 9 62,200 @Inventary o 146,220 @20 ©Buildings 9 36,0200Goodwill 9 101,630 @Cash 9 446,400 @Current liabilities o 25170IB Professional fees expense o 6200 @Cash 9 6200 & Proposal 2View transaction listJournal entry worksheetAB>Record the acquisition of net assets in Norris Inc.Note: Enter debits before credits.TransactionGeneral JournalDebitCredit1Record entryClear entryView general journal Proposal 2 View transaction list Journal entry worksheet Record the professional fees expense paid and costs of issuing shares. Mote: Enter debits before credits. Clear entry View general journal (b) Prepare the balance sheet of Myers after the takeover for each of the proposals being considered. Proposal 1