advance Financial Reporting

Q. No. 3: Sonic Enterprises Inc has decided to purchase 100% of the voting shares of Jackson Inc. for $300,000 in cash on May 1, 2019. On the date, the balance sheets of each of these companies were as follows: Sonic Inc Jackson Inc Cash and Short-Term $750,000 $30,000 Securities Inventory $60,000 $20,000 Plant and Equipment (net) $280,000 $140,000 Total Assets $1,090,000 $190,000 Current Liabilities $150,000 $25,000 Bonds Payable $120,000 $30,000 Common Shares $120,000 $70,000 Retained Earnings $700,000 $65,000 Total Liabilities and Equity $1,090,000 $190,000 On that date, the fair values of Jackson's assets and liabilities were as follows: Cash and Short-Term Securities $40,000 Inventory $15,000 Plant and Equipment (net) $250,000 Current Liabilities $25,000 Bonds Payable $25,000 Sonic's Book Values approximated their Fair Values on that date. Required: a) Calculate the amount of Goodwill arising from this combination. b) Prepare the journal entry to record Sonic's acquisition of Jackson's Shares. c) Prepare Sonic's Consolidated Balance Sheet innnediately following its acquisition of Jackson's assets