1. Parchesi, Inc. will acquire the net assets of Scrabble, Inc. for cash. Parchesi, which has a 30% marginal tax rate, will incur $25,000 of direct acquisition costs. Scrabble's balance sheet follows: Assets $ 30,000 90,000 $ 80,000 (50.000) Accounts Receivable Inventory Equipment Accumulated Depreciation Land Buildings Accumulated Depreciation Total Assets 30,000 50,000 $ 300,000 (100,000) 200,000 $ 400,000 Liabilities and Stockholders' Equity Bonds Payable Common Stock, $1 Par Paid-in-capital in excess of par Retained Earnings Total Liabilities and Stockholders' Equity $ 80,000 160,000 80,000 80,000 $ 400,000 Parchesi has secured appraisals indicating the following market values of Scrabble's accounts and embeds this evidence into its decision to pay the indicated purchase price below: Accounts Receivable Inventory Equipment Land Buildings Bonds Payable $ 30,000 95,000 40,000 50,000 250,000 75,000 Parchesi reports financial results on a calendar year basis. Ignore any tax effects. REQUIRED: In a WORD PROCESED document, make the entries to record this purchase, showing your work to support your entries, using the following two independent assumptions: a. Assume Parchesi paid $400,000 on 1/2/20 for Scrabble's net assets. What if the purchase date was 1/2/08 - how does your answer change? b. Assume Parchesi paid $300,000 on 1/2/20 for Scrabble's net assets. What if the purchase date was 1/2/08 - how does your answer change? 1. Parchesi, Inc. will acquire the net assets of Scrabble, Inc. for cash. Parchesi, which has a 30% marginal tax rate, will incur $25,000 of direct acquisition costs. Scrabble's balance sheet follows: Assets $ 30,000 90,000 $ 80,000 (50.000) Accounts Receivable Inventory Equipment Accumulated Depreciation Land Buildings Accumulated Depreciation Total Assets 30,000 50,000 $ 300,000 (100,000) 200,000 $ 400,000 Liabilities and Stockholders' Equity Bonds Payable Common Stock, $1 Par Paid-in-capital in excess of par Retained Earnings Total Liabilities and Stockholders' Equity $ 80,000 160,000 80,000 80,000 $ 400,000 Parchesi has secured appraisals indicating the following market values of Scrabble's accounts and embeds this evidence into its decision to pay the indicated purchase price below: Accounts Receivable Inventory Equipment Land Buildings Bonds Payable $ 30,000 95,000 40,000 50,000 250,000 75,000 Parchesi reports financial results on a calendar year basis. Ignore any tax effects. REQUIRED: In a WORD PROCESED document, make the entries to record this purchase, showing your work to support your entries, using the following two independent assumptions: a. Assume Parchesi paid $400,000 on 1/2/20 for Scrabble's net assets. What if the purchase date was 1/2/08 - how does your answer change? b. Assume Parchesi paid $300,000 on 1/2/20 for Scrabble's net assets. What if the purchase date was 1/2/08 - how does your answer change
