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The balance sheets of Abdul Co. and Lana Co. on June 30, Year 2, just before the transaction described below, were as follows: Abdul Lana

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The balance sheets of Abdul Co. and Lana Co. on June 30, Year 2, just before the transaction described below, were as follows: Abdul Lana Cash and receivables 93,000 20, 150 Inventory 60,500 8, 150 Plant assets (net) 236,000 66,350 $ 389,500 $ 94,650 Current liabilities $ 65,500 $ 27,600 Long-term debt 94,250 40, 100 Common shares 140,500 40,050 Retained earnings (deficit) 89,250 (13, 100) $ 389,500 $ 94,750 On June 30, Year 2, Abdul Co. purchased all of Lana Co.'s assets and assumed all of Lana Co.'s liabilities for $58,000 in cash. The carrying amounts of Lana's net assets were equal to their fair values except for the following: Fair value Inventory $10,050 Plant Assets 70, 100 Long-term debt 33,800 Required: a) Prepare the journal entries for Abdul Co. and for Lana Co. to record this transaction. b) Prepare the balance sheets for Abdul Co. and Lana Co. at June 30, Year 2, after recording the transaction noted above

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