In a pre-2009 business combination, Acme Company acquired all of Brem Company’s assets and liabilities for cash. After the combination Acme formally dissolved Brem. At the acquisition date, the following book and fair values were available for the Brem Company accounts:

	Book Values			Fair Values
Current assets	$	81,800		$	81,800
Equipment		131,000			198,000
Trademark		0			352,000
Liabilities		(67,800	)		(67,800	)
Common stock		(100,000	)
Retained earnings		(45,000	)

In addition, Acme paid an investment bank $31,200 cash for assistance in arranging the combination.

Using the legacy purchase method for pre-2009 business combinations, prepare Acme’s entry to record its acquisition of Brem in its accounting records assuming the following cash amounts of $690,400 and $439,400 were paid to the former owners of Brem.

How would these journal entries change if the acquisition occurred post-2009 and therefore Acme applied the acquisition method?

(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)

1. Record the acquisition of Brem using the purchase method assuming $690,400 was paid to the former owners of Brem

2. Record the acquisition of Brem using the purchase method assuming $439,400 was paid to the former owners of Brem

3. Record the acquisition of Brem using the acquisition method assuming $690,400 was paid to the former owners of Brem

4. Record the expenses related to the combination using the acquisition method assuming $690,400 was paid to the former owners of Brem

5. Record the acquisition of Brem using the acquisition method assuming $439,400 was paid to the former owners of Brem

6. Record the expenses related to the combination using the acquisition method assuming $439,400 was paid to the former owners of Brem

Answer rating: 100% (QA)

answer 1 current assets ac Dr 81800 equipment ac Dr 198000 trademark ac D... View the full answer