Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On May 1 , Sorlano Company reported the following account balances along with their estimated fair values: On that day, Zambrano paid cash to acquire

On May 1, Sorlano Company reported the following account balances along with their estimated fair values:
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 $131,000 to an Investment banking firm.
The following information was also avallable:
Zambrano further agreed to pay an extra $84,400 to the former owners of Sorlano 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
$42,200.
Soriano has a research and development project in process with an appralsed value of $206,000. However, the project has not yet
reached technological feasibility, and the project's assets have no alternative future use.
Required:
a. and b. Prepare Zambrano's journal entries to record the Sorlano acquisition assuming its initial cash payment to the former owners
was (a) $689,400 and (b) $806,200.
Note: If no entry is required for a transaction/event, select "No journal entry required" In the first account fleld.
Journal entry worksheet
Record the acquisition of Soriano Company. Assume its initial cash payment to
the former owners was $689,400.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Energy Audit Of Building Systems An Engineering Approach

Authors: Moncef Krarti

3rd Edition

0367820463, 978-0367820466

More Books

Students also viewed these Accounting questions

Question

Consistently develop management talent.

Answered: 1 week ago

Question

Create a refreshed and common vision and values across Europe.

Answered: 1 week ago

Question

Provide the best employee relations environment.

Answered: 1 week ago