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 Book Value Huang Book Value Fair Value Fair Value $1,000 1,000 2,000 Assets Cash Receivables-net Inventories Land Buildings-net Equipment-net Total assets Equities Accounts payable Other liabilities Common stock, $10 par Other paid-in capital Retained earnings Total equities $1,000 750 1,500 1.000 2,000 1,500 $7,750 1,500 3.000 1,500 $10,000 $50 25 75 50 75 75 $350 $50 50 100 100 100 100 $500 $800 900 $50 75 $800 1.000 3.000 1.200 1.750 $7.750 $50 75 100 50 75 $350 Business Combinations 49 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