Wren Corporation Balance Sheet January 1,2015 Assets Liabilities and Equity $ 79,000 92,000 55,000 294,000 30,000 $550,000 Current liabilities .. Bonds payable Accounts receivable $125,000 Inventory Other current assets 100,000 200,000 50,000 Common stock. Equipment (net) Trademark.. Paid-in capital in excess of par Retained earnings . 75,000 Total assets. Total liabilities and equity $550,000
Born Corporation agrees to acquire the net assets ofWren Corporation on January 1, 2015.Wren has the following balance sheet on the date of acquisition:
An appraiser determines that in-process R&D exists and has an estimated value of $20,000. The appraisal indicates that the following assets have fair values that differ from their book values:
Fair Value
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 98,000
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 340,000
Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Use value analysis to prepare the entry on the books of Born Corporation to acquire the net assets ofWren Corporation under each of the following purchase price scenarios:
1. Purchase price is $540,000.
2. Purchase price is $350,000.
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