Savoie Lte. is a manufacturer of specialized industrial machinery seeking to diversify its operations. After protracted negotiations,

Savoie Ltée. is a manufacturer of specialized industrial machinery seeking to diversify its operations. After protracted negotiations, the directors decided to purchase the assets and liabilities of Blackfish Ltd. and the spare parts retail division of Lynx Ltd.

At December 31, 2012, the statements of financial position of the three entities were as follows:

The acquisition agreement details are as follows:
Blackfish Savoie is to acquire all the assets (other than cash) and liabilities (other than bonds, provisions, and tax liabilities) of Blackfish for the following purchase consideration:
€¢ Shareholders in Blackfish are to receive three shares in Savoie in exchange for every four shares held. The shares in
Savoie are to be issued at their fair value of $3 per share. Costs of share issue amounted to $2,000.
€¢ Savoie is to provide sufficient cash that, when added to the cash already held, will enable Blackfish to pay out the current tax liability and provision for leave, to redeem the bonds at a premium of 5%, and to pay its liquidation expenses of $2,500.
The fair values of the assets and liabilities of Blackfish are equal to their carrying amounts with the exception of the following:
Fair value
Land and buildings.......... $60,000
Plant and machinery.......... 50,000
Incidental costs associated with the acquisition amount to $2,500. Lynx Savoie is to acquire the spare parts retail business of Lynx. The following information is available concerning that business, relative to the whole of Lynx Ltd:

The divisional net assets are to be acquired for $10,000 cash, plus 11,000 common shares in Savoie issued at their fair value of $3, plus the land and buildings that have been purchased from Blackfish. Incidental costs associated with the acquisition are $1,000.
Required
(a) Prepare the acquisition analysis for the acquisition transactions of Savoie.
(b) Prepare the journal entries for the acquisition transactions in the records of Savoie and Lynx.

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Savoie 60,000 100,000 16,000 24,000 20,000 35,000 150,000 59,000 Blackfish Lynx $25,000 36,000 4,000 15,000 $40,000 76,000 6,000 20,800 Land and buildings (net) Plant and machinery (net) Office equipment (net) Shares in listed companies Bonds in listed companies Accounts receivable Inventory Cash Goodwil 26,000 54,000 11,000 7,000 $178,000 14,000 6,000 10,000 16,000 50,000 60,000 22,000 $178,000 42,000 30,200 9,000 Accounts payable Current tax liability Provision for leave Bank loarn Bonds Share capital (issued at $1) Retained earnings $464,000 26,000 21,000 36,000 83,000 60,000 200,000 38,000 $224,000 27,000 7,000 17,500 43,500 90,000 39,000 $224,000 $464,000 Total amount Carrying amount $40,000 76,000 6,000 42,000 30,200 27,000 17,500 Spare parts division Carrying amount Land and buildings (net) Plant and machinery (net) Office equipment (net) Accounts receivable Inventory Accounts payable Provision for leave $20,000 32,000 2,000 21,000 12,000 14,000 7,000 Fair value $30,000 34,500 2,500 20,000 12,000 14,000 7,000