PAID Pop Company acquired Son Inc, by issuing 45,000 shares of stock, par value $1.00 per share. Market value of the stock was $20.00 per share at the time. Pop also paid $300,000 in cash. The assets and liabilities on Son's balance sheet were valued at fair value except for some equipment that was undervalued on the books by $115,000. There was also an unrecorded patent valued at $200,000 as well as an unrecorded trademark valued at $100,000. In addition, the agreement provided for additional consideration, valued at $50,000 if certain earnings targets were met. DOA ENTRY DR CR CONSOL The pre-acquisition balance sheets are shown below: PRE-ACQUISITION POP SON Cash 300,000 260,000 Accounts Receivable 250,000 135,000 Inventory 254,000 275,000 PP&E 2,300,000 356,500 Investment Patent Trademark Goodwill 3,104,000 1,026,500 POST-ACQUISITION POP SON 300,000 260,000 250,000 135,000 254,000 275,000 2,300,000 356,500 3,104,000 1,026,500 45,000 450,000 500,000 37,500 46,000 450,000 45,000 450,000 500,000 37,500 46,000 450,000 Accounts Payable Salaries and taxes payable Notes payable Contingent Liability Common Sock APIC Retained Earnings 250,000 950,000 909,000 3,104,000 60,000 106,500 326,500 1,026,500 250,000 950,000 909,000 3,104,000 60,000 106,500 326,500 1,026,500 PAID Pop Company acquired Son Inc, by issuing 45,000 shares of stock, par value $1.00 per share. Market value of the stock was $20.00 per share at the time. Pop also paid $300,000 in cash. The assets and liabilities on Son's balance sheet were valued at fair value except for some equipment that was undervalued on the books by $115,000. There was also an unrecorded patent valued at $200,000 as well as an unrecorded trademark valued at $100,000. In addition, the agreement provided for additional consideration, valued at $50,000 if certain earnings targets were met. DOA ENTRY DR CR CONSOL The pre-acquisition balance sheets are shown below: PRE-ACQUISITION POP SON Cash 300,000 260,000 Accounts Receivable 250,000 135,000 Inventory 254,000 275,000 PP&E 2,300,000 356,500 Investment Patent Trademark Goodwill 3,104,000 1,026,500 POST-ACQUISITION POP SON 300,000 260,000 250,000 135,000 254,000 275,000 2,300,000 356,500 3,104,000 1,026,500 45,000 450,000 500,000 37,500 46,000 450,000 45,000 450,000 500,000 37,500 46,000 450,000 Accounts Payable Salaries and taxes payable Notes payable Contingent Liability Common Sock APIC Retained Earnings 250,000 950,000 909,000 3,104,000 60,000 106,500 326,500 1,026,500 250,000 950,000 909,000 3,104,000 60,000 106,500 326,500 1,026,500