On May 1, Soriano Company reported the following account balances along with their estimated fair values ItemsCarrying AmountFair ValueReceivables$ 144,100$ 144,100Inventory77,40077,400Copyrights135,500509,500Patented technology901,000744,000Total assets$ 1,258,000$ 1,475,000Current liabilities$ 235,000$ 235,000Long term liabilities686,000671,300Common stock100,0000Retained earnings237,0000Total liabilities and equities$ 1,258,0000 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 $133,500 to an investment banking firm The following information was also available Zambrano further agreed to pay an extra $87,600 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 $43,800 Soriano has a research and development project in process with an appraised value of $236,000 However, the project has not yet reached technological feasibility, and the projects assets have no alternative future use Required a and b Prepare Zambranos journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $745,000 and (b) $848,700 Note If no entry is required for a transaction event, select No journal entry required in the first account field

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Posted on Jul 26, 2024

On May 1, Soriano Company reported the following account balances along with their estimated fair values: ItemsCarrying AmountFair ValueReceivables$ 144,100$ 144,100Inventory77,40077,400Copyrights135,500509,500Patented technology901,000744,000Total assets$ 1,258,000$ 1,475,000Current

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

ItemsCarrying AmountFair ValueReceivables$ 144,100$ 144,100Inventory77,40077,400Copyrights135,500509,500Patented technology901,000744,000Total assets$ 1,258,000$ 1,475,000Current liabilities$ 235,000$ 235,000Long-term liabilities686,000671,300Common stock100,0000Retained earnings237,0000Total liabilities and equities$ 1,258,0000

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 $133,500 to an investment banking firm.

The following information was also available:

Zambrano further agreed to pay an extra $87,600 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 $43,800.
Soriano has a research and development project in process with an appraised value of $236,000. However, the project has not yet reached technological feasibility, and the projects assets have no alternative future use.

Required:

a. and b. Prepare Zambranos journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $745,000 and (b) $848,700.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.