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On Dec 31, 2018, the balance sheets of Paper Inc. and Scissors Inc. were as follows: Paper Inc Scissors Inc Cash and Short-Term Securities $400,000

On Dec 31, 2018, the balance sheets of Paper Inc. and Scissors Inc. were as follows:

Paper Inc

Scissors Inc

Cash and Short-Term Securities

$400,000

$ 25,000

Inventory

$ 50,000

$ 10,000

Plant and Equipment (net)

$300,000

$120,000

Total Assets

$750,000

$155,000

Current Liabilities

$ 75,000

$ 20,000

Bonds Payable

$100,000

$ 30,000

Common Shares

$150,000

$ 55,000

Retained Earnings

$425,000

$ 50,000

Total Liabilities and Equity

$750,000

$155,000

On that date, the fair values of Scissors's Assets and Liabilities were as follows:

Cash & Short-Term Securities

$ 32,000

Inventory

$ 11,000

Plant and Equipment (net)

$140,000

Current Liabilities

$ 15,000

Bonds Payable

$ 28,000

On Jan 1, 2019, Paper issued 6,000 new common shares with a market value of $42.00 per share as consideration for Scissors's net assets. Prior to the issue, Paper had 10,000 outstanding common shares. Required: a) Calculate the amount of Goodwill arising from this combination. b) Prepare the journal entry to record Paper's acquisition of Scissors's assets. c) Prepare Paper's Balance Sheet immediately following its acquisition of Scissors's net assets. d) Prepare Scissors's Balance Sheet following the acquisition.

e) Assume Paper paid $252,000 in cash as consideration for Scissors's net assets. Prepare Paper's Balance Sheet immediately following its acquisition of Scissors's net assets.

f) Assume Paper decided to purchase 100% of the voting shares of Scissors Inc. for $252,000 in Cash on Jan 1, 2019.

Prepare the journal entry to record Paper's acquisition of Scissors's shares.

Prepare Paper's Consolidated Balance Sheet immediately following its acquisition of Scissors's shares.

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