On January 4. 2004, Pronti Company acquired all of the net assets of Scott Company for SI 20.000 cash. The two companies merged with Pronti Company surviving. The balance sheets for each company prior to the merger follow.

Required: 1. How much goodwill was involved in this merger? Show computations. 2. Record the merger by Pronti Company on January 4. 2004. 3. Prepare a consolidated balance sheet immediately after the acquisition.

Transcribed Image Text:

Pronti Balance Sheets at January 4, 2004 Company Scott Company Cash $118,000 $23.000 Property and equipment (net) 132.000 65.000* Total assets $250.000 $88.000 Liabilities $ 27.000 $12.000 Common stock (par $5) 120.000 40.000 Retained earnings 103.000 36.000 Total liabilities and stockholders' equity $250,000 $88.000