Question
ZAIN COMPANY Balance Sheet (prior to business combination) December 31, 2020 Assets Inventories $250,000 Plant assets (net) 300,000 Other assets 400,000 Total assets $950,000 Liabilities
ZAIN COMPANY Balance Sheet (prior to business combination) December 31, 2020 Assets Inventories $250,000 Plant assets (net) 300,000 Other assets 400,000 Total assets $950,000 Liabilities & Stockholders' Equity Liabilities $350,000 Common stock, $5 par 150,000 Additional paid-in capital 250,000 Retained earnings 200,000 Total liabilities & stockholders' equity $950,000 On December 31, 2020, VIVA issued 60,000 of its $5 par (current fair value $13) common stock for all the outstanding common stock of Zain, which was then liquidated. Also, on December 31, 2020, VIVA paid $60,000 out-of-pocket costs in connection with the business combination, of which $25,000 were finder's, accounting, and legal fees directly related to the combination, and $35,000 were costs of registering and issuing the common stock to affect the combination. Current fair values of Zain's inventories and plant assets were $260,000 and $320,000, respectively; other assets and liabilities had current fair values equal to their carrying amounts. Instructions: Prepare journal entries on December 31, 2020, for VIVA Corporation to record the business combination with Zain Company. Disregard income taxes.
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