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On May 1, Soriano Co. reported the following account balances along with their estimated fair values: Carrying Fair Value 245, 300 79,200 505,500 658,000 Amount Receivables 2$ 245, 300 79,200 125,500 875,000 24 Inventory Copyrights Patented technology $ 1,325,000 $ 1,488,000 253,000 729,800 Total assets Current liabilities 24 %24 253,000 740,000 100,000 232,000 $ 1,325,000 Long -term liabilities Common stock Retained earnings Total liabilities and equities On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $124,500 to an investment banking firm. The following information was also available: • Zambrano further agreed to pay an extra $71,200 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,600. • Soriano has a research and development project in process with an appraised value of $221,500. However, the project has not yet reached technological feasibility and the project's assets have no alternative future use. a&b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $670,000 & (b) $790,100. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

On May 1, Soriano Co. reported the following account balances along with their estimated fair values: Carrying Fair Value 245, 300 79,200 505,500 658,000 Amount Receivables 2$ 245, 300 79,200 125,500 875,000 24 Inventory Copyrights Patented technology $ 1,325,000 $ 1,488,000 253,000 729,800 Total assets Current liabilities 24 %24 253,000 740,000 100,000 232,000 $ 1,325,000 Long -term liabilities Common stock Retained earnings Total liabilities and equities On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $124,500 to an investment banking firm. The following information was also available: • Zambrano further agreed to pay an extra $71,200 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,600. • Soriano has a research and development project in process with an appraised value of $221,500. However, the project has not yet reached technological feasibility and the project's assets have no alternative future use. a&b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $670,000 & (b) $790,100. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.23E: Unusual income statement items Assume that the amount of each of the following items is material to...
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On May 1, Soriano Co. reported the following account balances along with their estimated fair values: Carrying Amount %24 Fair Value Receivables $ Inventory Copyrights Patented technology 245, 300 79,200 125,500 875,000 $ 1,325,000 $ 1,488,000 245,300 79,200 505,500 658,000 Total assets Current liabilities %24 253,000 253,000 740,000 100,000 232,000 Long-term liabilities Common stock 729,800 Retained earnings Total liabilities and equities $ 1,325,000 On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $124,500 to an investment banking firm. The following information was also available: • Zambrano further agreed to pay an extra $71,200 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,600. • Soriano has a research and development project in process with an appraised value of $221,500. However, the project has not yet reached technological feasibility and the project's assets have no alternative future use. a&b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $670,000 & (b) $790,100. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Transcribed Image Text:On May 1, Soriano Co. reported the following account balances along with their estimated fair values: Carrying Amount %24 Fair Value Receivables $ Inventory Copyrights Patented technology 245, 300 79,200 125,500 875,000 $ 1,325,000 $ 1,488,000 245,300 79,200 505,500 658,000 Total assets Current liabilities %24 253,000 253,000 740,000 100,000 232,000 Long-term liabilities Common stock 729,800 Retained earnings Total liabilities and equities $ 1,325,000 On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $124,500 to an investment banking firm. The following information was also available: • Zambrano further agreed to pay an extra $71,200 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,600. • Soriano has a research and development project in process with an appraised value of $221,500. However, the project has not yet reached technological feasibility and the project's assets have no alternative future use. a&b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $670,000 & (b) $790,100. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet 1 2 3 4 > Record the acquisition of Soriano Co. Assume its initial cash payment to the former owners was $670,000. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal
Transcribed Image Text:Journal entry worksheet 1 2 3 4 > Record the acquisition of Soriano Co. Assume its initial cash payment to the former owners was $670,000. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal
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