Q2.

X Inc. acquired 100% of the outstanding common stock of Y Inc. for $250,000 cash and 20,000 shares of its own common stock ($5 par value), which was trading at $10 per share at the acquisition date. The estimated fair market values of assets, liabilities, and equity accounts of Y. Inc are as follows: (2 marks)

Particulars	Amounts $	Particulars	Amounts &
Accounts Receivable	100,000	Liabilities	200,000
Inventory	50,000	Retained Earnings	50,000
LT Marketable sec.	60,000	Common Stock	100,000
PP&E	140,000
Total Assets	350,000	Total Liability /Equity	350,000

Require:

1. Calculate Acquisition cost of X.Inc
2. Calculate Good will of X.Inc
3. Pass journal entry in books of X. Inc