2/15/23 Alpha company purchased all the outstanding shares Omega company for $200,000 in cash and by...

  

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2/15/23 Alpha company purchased all the outstanding shares Omega company for $200,000 in cash and by issuing 20,000 shares of $1 par common stock with a fair value of $15 per share on the acquisition date. In addition, Alpha agreed to pay the former owners of Omega $100,000 if certain performance goals were met over the next five years. Alpha estimates the fair value of this contingency to be $45,000. To facilitate the merger, Alpha paid $30,000 to various professional service organizations. Additional fair value information is provided below. Omega Company information as of 2/16/23 Carrying Amount Fair Value Receivables Inventory Copyrights Patented technology Total Assets Current Liabilities Long-term liabilities Common Stock Retained Earnings Total Liab & Equity 90,000 82,000 130,000 900,000 1,202,000 120,000 650,000 100,000 332,000 1,202,000 90,000 85,000 200,000 700,000 120,000 625,000 Required: 1. Prepare the journal entries associated with this acquisition if the acquisition is a statutory merger. 2. Prepare the journal entries asscoiated with this acquisition if Omega maintains separate incorporation. 2/15/23 Alpha company purchased all the outstanding shares Omega company for $200,000 in cash and by issuing 20,000 shares of $1 par common stock with a fair value of $15 per share on the acquisition date. In addition, Alpha agreed to pay the former owners of Omega $100,000 if certain performance goals were met over the next five years. Alpha estimates the fair value of this contingency to be $45,000. To facilitate the merger, Alpha paid $30,000 to various professional service organizations. Additional fair value information is provided below. Omega Company information as of 2/16/23 Carrying Amount Fair Value Receivables Inventory Copyrights Patented technology Total Assets Current Liabilities Long-term liabilities Common Stock Retained Earnings Total Liab & Equity 90,000 82,000 130,000 900,000 1,202,000 120,000 650,000 100,000 332,000 1,202,000 90,000 85,000 200,000 700,000 120,000 625,000 Required: 1. Prepare the journal entries associated with this acquisition if the acquisition is a statutory merger. 2. Prepare the journal entries asscoiated with this acquisition if Omega maintains separate incorporation.

Answer rating: 100% (QA)

ANSWER 1 Journal Entries for Statutory Merger a To record the purchase of Omega Company Account Debi... View the full answer