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
Receivables	$	129,000	$	38,150
Inventory		78,500		9,950
Plant assets (net)		272,000		84,350
	$	479,500	$	132,450
Current liabilities	$	83,500	$	45,600
Long-term debt		112,250		58,100
Common shares		158,500		58,050
Retained earnings (deficit)		125,250		(29,300)
	$	479,500	$	132,450

On June 30, Year 2, Abdul Co. purchased all of Lana Co. assets and assumed all of Lana Co. liabilities for $94,000 in cash. The carrying amounts of Lanas net assets were equal to fair value except for the following:

	Fair Value
Inventory	$11,850
Plant assets	88,100
Long-term debt	51,800

Required:

1. Prepare the journal entries for Abdul Co. and for Lana Co. to record this transaction

a) Record the acquisition of net assets of Lana Co. in Abdul Co.'s books.

b) Record the sale of assets and liabilities to Abdul Co. in Lana Co.'s books.

2. Prepare balance sheets for Abdul Co. and Lana Co. at June 30, Year 2, after recording the transaction noted above.

Abdul Co. and Lana Co.
Balance Sheet
at June 30, Year 2
	Abdul Co.		Lana Co.
Receivables	$		$
Inventory
Plant assets (net)
Goodwill
	$		$
Current liabilities	$		$
Long-term debt
Common shares
Retained earnings (deficit)
	$		$