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 Noah's net identifiable assets. Manna is considered to be the clear acquirer. Costs associated with the business combination are:

Legal, appraisal, and finders' fees

$5,000

Costs of issuing shares

7,000

$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

$ 52,500

Accounts Receivable

167,200

61,450

56,200

Inventory

374,120

110,110

134,220

Land

425,000

75,000

210,000

Buildings (at net)

250,505

21,020

24,020

Equipment (at net)

78,945

17,705

15,945

Total Assets

$1,435,770

$337,785

Current Liabilities

$ 133,335

$ 41,115

$ 41,115

Non-current Liabilities

------------

150,000

155,000

Common Shares

500,000

100,000

Retained Earnings

802,435

46,670

Total 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)