Francisco Inc. acquired 100 percent of the voting shares of Beltran Company on January 1, 2017. In exchange, Francisco paid $815,500 in cash and issued 114,000 shares of its own $1 par value common stock. On this date, Franciscos stock had a fair value of $12 per share. The combination is a statutory merger with Beltran subsequently dissolved as a legal corporation. Beltrans assets and liabilities are assigned to a new reporting unit.

The following reports the fair values for the Beltran reporting unit for January 1, 2017, and December 31, 2018, along with their respective book values on December 31, 2018.

Beltran Reporting Unit	Fair Values 1/1/17			Fair Values 12/31/18			Book Values 12/31/18
Cash	$	86,000		$	51,000		$	51,000
Receivables		217,000			259,500			259,500
Inventory		373,000			406,000			391,600
Patents		695,500			778,000			661,500
Customer relationships		650,000			620,000			570,000
Equipment (net)		368,500			281,000			275,800
Goodwill		?			?			554,000
Accounts payable		(154,500	)		(233,000	)		(233,000	)
Long-term liabilities		(606,000	)		(546,000	)		(546,000	)

1. Prepare Franciscos journal entry to record the assets acquired and the liabilities assumed in the Beltran merger on January 1, 2017.

2. On December 31, 2018, Francisco opts to forgo any goodwill impairment qualitative assessment and estimates that the total fair value of the entire Beltran reporting unit is $1,768,000. What amount of goodwill impairment, if any, should Francisco recognize on its 2018 income statement?

Prepare Franciscos journal entry to record the assets acquired and the liabilities assumed in the Beltran merger on January 1, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Show the amount of cash received and paid as two separate amounts.)

Journal entry worksheet

• Record the assets acquired and the liabilities assumed in the Beltran merger on January 1, 2017.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
January 01, 2017