CASE B: Ignore the facts provided in Case A$.$

After close of business on December $31,20$X$8$ Eastside Inc. acquired the net assets of

Broadchurch Inc. by paying $$50,000$ cash, issuing $100,000$ common shares and a two$-$

year, $12\%$ note for $$300,000.$ Eastside Inc. incurred $$30,000$ in legal fees to complete

the transaction as well as $$20,000$ in stock issuance costs, paid for in cash.

REQUIRED:

Prepare Eastside Inc.$\text{'}$s statement of financial position after completion of the business

combination.

QUESTION $1$

Broadchurch Inc. and Eastside Inc. had the following Statement of Financial Position on December $31,20$X$8$ and the associated fair values prior to acquisition;

Broadchurch Inc. Eastside Inc. Book Values Fair Values Book Values Fair Values Cash $ $260,000$ $ $260,000$ $ $161,000$ $ $161,000$ Accounts receivable $350,000342,000245,000230,000$ Inventory $285,000261,000165,000180,000$ Land $300,000450,000125,000260,000$ PPE $($net$)1,200,0001,150,000450,000396,000$ Intangible assets $125,000150,000-?$ Goodwill $245,000?89,000?$ $ $2,765,000$ $ $1,235,000$ Current Liabilities $ $125,000$ $ $122,000$ $ $215,000$ $ $215,000$ Long$-$term liabilities $500,000525,000900,000860,000$ Common shares $500,000300,000$ Retained earnings $1,640,000(180,000)$ $ $2,765,000$ $ $1,235,000$

Additional information:

Prior to the acquisition, Broadchurch Inc. had $100,000$ shares outstanding, while Eastside Inc. had $200,000$ shares outstanding. The market price of Broadchurch Inc.$\text{'}$s shares on December $31,20$X$8$ and on January $1,20$X$9$ was $$5\mathrm{.}00$ per share, and the price of Eastside Inc.$\text{'}$s shares was $$2\mathrm{.}00$ per share. Broadchurch Inc. had ongoing litigation against it$.$ The legal team expects that the lawsuit could be settled for $$300,000.$ Eastside Inc. has an unrecorded trademark worth $$125,000.$

DO CASE B PLEASE.