Goodwill and Bargain Purchase

Panda Corporation paid $1,200,000 in cash for all of Sim Corporation's assets and liabilities in a merger. The following table shows three possible cases for the merger:

	Fair Value
Account	Case 1	Case 2	Case 3
Current assets	$360,000	$480,000	$60,000
Plant assets	720,000	960,000	1,716,000
Identifiable intangible assets	840,000	360,000	240,000
Liabilities	(960,000)	(600,000)	(360,000)
Fair value of identifiable net assets	$960,000	$1,200,000	$1,656,000

In each of the above cases, prepare the journal entry Panda makes to record the acquisition. HINT: Select "N/A" if journal entry does not apply.

Case 1:

General Journal
Description	Debit	Credit
Current assets	Answer	Answer
Plant assets	Answer	Answer
Identifiable intangible assets	Answer	Answer
Answer: CashN/AGain on acquisition/Goodwill	Answer	Answer
Liabilities	Answer	Answer
Cash	Answer	Answer
Answer: Goodwill/N/A/Cash/Gain on acquisition	Answer	Answer

Case 2:

General Journal
Description	Debit	Credit
Current assets	Answer	Answer
Plant assets	Answer	Answer
Identifiable intangible assets	Answer	Answer
Answer: Goodwill/Cash/Gain on acquisition/N/A	Answer	Answer
Liabilities	Answer	Answer
Cash	Answer	Answer
Answer: Cash/Gain on acquisition/N/A/Goodwill	Answer	Answer

Case 3:

General Journal
Description	Debit	Credit
Current assets	Answer	Answer
Plant assets	Answer	Answer
Identifiable intangible assets	Answer	Answer
Answer: Goodwill/CashN/AGain on acquisition	Answer	Answer
Liabilities	Answer	Answer
Cash	Answer	Answer
Answer: Cash/Goodwill/Gain on acquisition/N/A	Answer	Answer