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30 November, 15:24

Pun Corporation concluded the fair value of Slender Company was $60,000 and paid that amount to acquire its net assets. Slender reported assets with a book value of $55,000 and fair value of $71,000 and liabilities with a book value and fair value of $20,000 on the date of combination. Pun also paid $4,000 to a search firm for finder's fees related to the acquisition. Required: Prepare the journal entries to be made by Pun to record its investment in Slender and its payment of the finder's fees. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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  1. 30 November, 15:27
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    Investment on Slender 51,000

    Goodwill 9,000

    fees expense 4,000

    Cash 64,000

    Explanation:

    fair value of Slender:

    71,000 - 20,000 = 51,000

    purchase price 60,000

    goodwil 9,000

    finder's fees 4,000

    It will recognize the goodwill for Slender

    it will pay the finder's and recognize them as expense

    The total cash will be 60,000 to aquire Slender and the 4,000 finder's expense
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