The balance sheets of Abdul Co. and Lana Co. on June 30, Year 2, just before the transaction described below, were as follows:

On June 30, Year 2, Abdul Co. purchased all of Lana Co. assets and assumed all of Lana Co. liabilities for $58,000 in cash. The carrying amounts of Lana's net assets were equal to fair value except for the following:

(a) Prepare the journal entries for Abdul Co. and for Lana Co. to record this transaction.

(b) Prepare the balance sheets for Abdul Co. and Lana Co. at June 30, Year 2 after recording the transaction noted above.

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Abdul Lana $ 93,000 $20,150 Cash and receivables Inventory Plant assets (net) 60,500 8,150 66,350 $94,650 $27,600 236,000 $389,500 $ 65,500 Current liabilities Long-term debt 94,250 40,100 40,050 Common shares 140,500 Retained earnings (deficit) (13,100) 89,250 $389,500 $4,650