International Beverages acquires Ecoplastics Recycling Company for $100,000,000 in cash. Ecoplastics’ balance sheet reports the following assets and liabilities, at fair value:

Cash & receivables	$ 500,000
Inventories	1,100,000
Buildings & equipment	35,000,000
Patents & Trademarks	10,000,000
Current liabilities	7,000,000
Long-term debt	40,000,000

Eco plastic also has developed technology, valued at $15,000,000, which does not appear on its balance sheet but is appropriately reported by International Beverages on acquisition.

a. Prepare the journal entry International Beverages makes to record the acquisition of Ecoplastics, assuming this is a merger.

b. Repeat Part a, assuming this is a stock acquisition.

Answer rating: 100% (QA)

a Journal entry for the acquisition of Ecoplastics assuming it is a merger Date Date of Acquisition 1 To record the acquisition of Ecoplastics EcoPlas... View the full answer