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Problem 2-26 (Algo) (LO 2-5, 2-6a, 2-6b, 2-8) On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $ 72,600 89,400 135,000 921,000 $ 1,218,000 Receivables Inventory Copyrights Patented technology Items Total assets Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and equities View transaction list 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 $138.500 to an investment banking firm. Journal entry worksheet < 1 2 The following information was also available: . Zambrano further agreed to pay an extra $83.400 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 $41,700. • Soriano has a research and development project in process with an appraised value of $210,000. However, the project has not yet reached technological feasibility, and the project's assets have no alternative future use. Required: a. and b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $656,700 and (b) $777,100. Note: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. Transaction 1 $ 229,000 672,000 100,000 217,000 $ 1,218,000 3 4 Note: Enter debits before credits. Record entry Fair Value $ 72,600 89,400 530,000 698,000 $ 1,390,000 $ 229,000 653,600 e Record the acquisition of Soriano Company. Assume its initial cash payment to the former owners was $656,700. e General Journal Clear entry Debit Credit View general journal

Problem 2-26 (Algo) (LO 2-5, 2-6a, 2-6b, 2-8) On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $ 72,600 89,400 135,000 921,000 $ 1,218,000 Receivables Inventory Copyrights Patented technology Items Total assets Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and equities View transaction list 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 $138.500 to an investment banking firm. Journal entry worksheet < 1 2 The following information was also available: . Zambrano further agreed to pay an extra $83.400 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 $41,700. • Soriano has a research and development project in process with an appraised value of $210,000. However, the project has not yet reached technological feasibility, and the project's assets have no alternative future use. Required: a. and b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $656,700 and (b) $777,100. Note: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. Transaction 1 $ 229,000 672,000 100,000 217,000 $ 1,218,000 3 4 Note: Enter debits before credits. Record entry Fair Value $ 72,600 89,400 530,000 698,000 $ 1,390,000 $ 229,000 653,600 e Record the acquisition of Soriano Company. Assume its initial cash payment to the former owners was $656,700. e General Journal Clear entry Debit Credit View general journal

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 2-26 (Algo) (LO 2-5, 2-6a, 2-6b, 2-8) On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $72,600 89,400 Fair Value $ 72,600 89,400 135,000 921,000 $ 1,218,000 Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and equities Items View transaction list Journal entry worksheet 1 2 < 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 $138.500 to an investment banking firm. The following information was also available: . Zambrano further agreed to pay an extra $83,400 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 $41,700. . • Soriano has a research and development project in process with an appraised value of $210,000. However, the project has not yet reached technological feasibility, and the project's assets have no alternative future use. Required: a. and b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $656,700 and (b) $777,100. Note: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. Note: Enter debits before credits. Transaction 1 $ 229,000 672,000 100,000 217,000 $ 1,218,000 Record entry 530,000 698,000 $ 1,390,000 Record the acquisition of Soriano Company. Assume its initial cash payment to the former owners was $656,700. $ 229,000 653,600 General Journal Clear entry 8 8 8 Debit Credit View general journal
Transcribed Image Text:Problem 2-26 (Algo) (LO 2-5, 2-6a, 2-6b, 2-8) On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $72,600 89,400 Fair Value $ 72,600 89,400 135,000 921,000 $ 1,218,000 Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and equities Items View transaction list Journal entry worksheet 1 2 < 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 $138.500 to an investment banking firm. The following information was also available: . Zambrano further agreed to pay an extra $83,400 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 $41,700. . • Soriano has a research and development project in process with an appraised value of $210,000. However, the project has not yet reached technological feasibility, and the project's assets have no alternative future use. Required: a. and b. Prepare Zambrano's journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (a) $656,700 and (b) $777,100. Note: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. Note: Enter debits before credits. Transaction 1 $ 229,000 672,000 100,000 217,000 $ 1,218,000 Record entry 530,000 698,000 $ 1,390,000 Record the acquisition of Soriano Company. Assume its initial cash payment to the former owners was $656,700. $ 229,000 653,600 General Journal Clear entry 8 8 8 Debit Credit View general journal
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