Manna Ltd. enters into a business combination with Noah Inc. in which Manna purchases all of the identifiable assets and liabilities of Noah Inc. To effect the business combination, Manna issued 50,000 of its common shares currently trading at $8.00 per share for all of Noahs net identifiable assets. Manna is considered to be the clear acquirer. Costs associated with the business combination are:

Legal, appraisal, and finders' fees$5,000Costs of issuing shares7,000$12,000

Balance sheet data for the two companies immediately before the business combination are below:

Manna Ltd.

Book Value

Noah Inc.

Book Value Fair Value

Cash$ 140,000$ 52,500$ 52,500Accounts Receivable167,20061,45056,200Inventory374,120110,110134,220Land425,00075,000210,000Buildings (at net)250,50521,02024,020Equipment (at net)78,94517,70515,945Total Assets$1,435,770$337,785Current Liabilities$ 133,335$ 41,115$ 41,115Non-current Liabilities------------150,000155,000Common Shares500,000100,000Retained Earnings802,43546,670Total Liabilities and Shareholders Equity$1,435,770$337,785

Required:

• Calculate any goodwill created at the time of the business combination. (3 marks)
• Prepare the journal entries on Manna's books to record the business combination. (8 marks)
• Prepare Manna's balance sheet immediately after the business combination. Use an appropriate three line title. (4 marks)