2 XYZ Corporation expanded its operations by purchasing ABC Corporation on December 31, 2018, 3 The exchange was structured so that it was nontaxable. XYZ issued 14,000 shares of its $2 par stock 4 having a $30 market value for the net assets of ABC and paid cash for the following costs related to 7 9 6. The following balance sheet was prepared for ABC Corporation on the date of purchase. ABC Corporation Balance Sheet December 31, 2018 10 Liabilities and Equity 12 Current assets 150,000 Accounts payable 90,000 13 Inventory 35,000 Bonds Payable 85,000 14 Property, plant & Equipment: Stockholder's equity 15 Land 28,000 Common stock: 16 Building 165,000 ($10 par) 40,000 Accum depreciation (80,000) Retained earnings 153,0 193.000 18 Equipment 95,000 19 Accum depreciation (25.000) 20 Total assets $368,000 Total liabilities and Equity $368,000 22 The companies agreed that the following market values should replace the above book values 23 for the purpose of the purchase Building $200,000 Equipment 78,000 17 / 27 Instructions 28 Assume that the price is high enough for goodwill. Prepare the journal entries on the books of the XYZ 29 Corporation. Assume a tax rate of 30%. Use the supporting schedule that follows to orgaanize your 30 calculations 31 32 A. Computation of assigned Values for Long-Lived Assets 33 Total consideration 34 Market value of securities issued 35 Direct acquisition costs 36 Total price Less assignment to indentifable 37 assets and liabilities 38 Cureent assets 39 Inventory 40 Accounts payable 41 Bonds payable 42 Land 43 Building 44 DTL 45 Equipment 46 DTLT 47 Available for goodwill net lof DTL 48 Goodwill 49 / / 51 B. Record the journal entries for the purchase of ABC Corporation in an Excel Spreadsheet Case 4.1