P1-4 Bargain purchase, allocation schedule, and balance sheet The balance sheets for Pablo Corporation and Diego Corporation at December 31, 2016 are summarized as follows (in thousands) Pablo Corporation Diego Corporation Book Value Fair Value Book Value Fair Value $100 50 150 S100 SO 130 50 ISO 100 S580 100 540 30 80 30 70 50 $300 $40 30 100 50 100 75 $395 200 150 $750 Assets Cash Receivables net Inventories Land Buildings-net Equipment-net Total assets Equities Accounts payable Other liabilities Common stock, S10 par Other paid in capital Retained earnings Total equities **3*3*3 ** SRO 90 $80 100 200 100 100 S580 S SO 75 100 25 $300 On January 1, 2017, Pablo Corporation acquired all of Diego Corporation's outstanding common stock for $250.000. Pablo paid $50,000 in cash and issued a five-year, 10 percent note for the balance. Diego was dissolved REQUIRED 1. Prepare a schedule to show how the investment cost is allocated to identifiable assets and liabilities. 2. Prepare a balance sheet for Pablo Corporation on January 1, 2017. immediately after the acquisition. P1-5 Journal entries and balance sheet for an acquisition Ling Corporation decided to acquire all of Huang Corporation's voting common stock on January 1, 2017. The purchase price consisted of $10,000 for the registering and issuing of 10,000 shares of Ling Corporation. The market value of the issuance of these shares is $300.000. The purchase price also includes $30,000 for accounting and legal fees. However, Ling is undecided on the additional amount of cash to be paid. Balance sheet information for the companies on December 31, 2016, is summarized as follows (in thousands): Ling Huang Book Value Fair Value Book Value Fair Value Assets $1.000 750 1.500 1.000 2.000 1.500 $7.750 $1.000 1,000 2.000 1.500 3.000 1.500 S10,000 SSO 25 75 50 75 75 S350 SSO 50 100 100 100 100 $500 Cash Receivables-net Inventories Land Buildings-net Equipment-net Total assets Equities Accounts payable Other liabilities Common stock. Sio par Other paid-in capital Retained earnings Total equities S800 900 SSO 75 S800 1,000 3.000 1.200 1.750 $7.750 SSO 75 100 50 75 S350 REQUIRED 1. Prepare journal entries and a balance sheet for Ling Corporation immediately after the acquisition if it decides to include $50,000 of cash in the purchase price. 2. Prepare journal entries and a balance sheet for Ling Corporation immediately after the acquisition if it decides to include $100,000 of cash in the purchase price