On May 1, Soriano Co. reported the following account balances along with their estimated fair values: Carrying Amount Fair Value Receivables $ 188,400 $188,400 Inventory 76,600 76,600 Copyrights 146,000 522,000 Patented technology 864,000 646,000 Total assets $1,275,000 $1,433,000 ________________________________________________________________________________ ________________________________________________________________________________ Current liabilities $ 182,000 $ 182,000 Long-term liabilities 700,000 682,000 Common stock 100,000 Retained earnings 293,000 ________________________________________ ________________________________________ Total liabilities and equities $1,275,000 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, Zambrano also paid $123,000 to an investment banking firm. The following information was also available: ? Zambrano further agreed to pay an extra $74,000 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $37,000. ? Soriano has a research and development project in process with an appraised value of $230,000. However, the project has not yet reached technological feasibility 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 former owners was (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. $746,500 b. $853,200

On May 1, Soriano Co. reported the following account balances along with their estimated fair values: Carrying Amount Receivable s $ 864,000 Patented technology 646, 000 1,43 $ 3,00 0 $ 1,275,000 $ 182,000 182, $ 000 700,000 682, 000 Long-term liabilities Common stock Retained earnings Total liabilities and equities 188, $ 400 76,6 00 522, 000 76,600 Copyrights Current liabilities 188,400 146,000 Inventory Total assets Fair Value 100,000 293,000 $ 1,275,000 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, Zambrano also paid $123,000 to an investment banking firm. The following information was also available: Zambrano further agreed to pay an extra $74,000 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $37,000. Soriano has a research and development project in process with an appraised value of $230,000. However, the project has not yet reached technological feasibility 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 former owners was (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a.$746,500. b . $853,200