On May 1, Soriano Co. reported the following account balances along with their estimated fair values:

Carrying Amount Fair value

Receivables $ 187,100 $ 187,100

Inventory 79,400 79,400

Copyrights 126,500 502,500

Patented technology 854,000 649,000

Total assets 1,247,000 1,418,000

Current liabilities $ 232,000 $ 232,000

Long term liabilities 695,000 683,800

Cmmon stock 100,000

Retained earnings 220,000

Total liabilities and equities $ 1,247,000

On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambroano also paid $140,000 to an investment banking firm.

The following information was also avaliable:

Zambrano further agreed to pay an extra $85,200 to the formal owners of Soriano only if they meet certain revenue goals during the next two years. Zambarno estimated the present value of its probability adjusted expected payment for this contingency at $42,600.

Soriano has a research and development project in the process with an appraised value of $211,500. However, the project has not yet reached technological fessibility and the project's assets have no alternative future use.

Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the formal owners was (if no entry is required for a tranaction/event, select No journal entry required" in the first account field.)

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Journal Entry Worksheet

Transaction General Journal Debit Credit

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Journal Entry Worksheet

Transaction General Journal Debit Credit

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