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Show your steps. On January 1, 2015, Brown Inc. acquired Larson Company's net assets. Larson ceases to exist as a separate legal entity after the
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On January 1, 2015, Brown Inc. acquired Larson Company's net assets. Larson ceases to exist as a separate legal entity after the acquisition. On this date, Larson's condensed account balances showed the following Book ValueFair Value $370,000 480,000 $280,000 440,000 (130,000) 30,000 80,000 Current Assets Plant and Equipment Accumulated Depreciation Goodwill Patents Current Liabilities Long-Term Debt Common Stock Additional Paid-in Capital Retained Earnings 120,000 (140,000) (140,000) (100,000) (110,000) (200,000) (120,000) (140,000) Brown pays for the net assets by giving Larson Company some of Brown's own common stock. The common stock had a par value of $100,000 and a fair value of $800,000. Brown also paid $10,000 in acquisition costs and S15,000 in stock issuance costs 13. The journal entry or entries to record this purchase on Brown's books, includes the following amount of goodwill: a. $0 b. $80,000 c. $90,000 d. $105,000Step by Step Solution
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