Joey Co. paid $3,500,000 in cash, issued 1,000,000 ($0.50 Par value) of its own shares (Fair value of those shares equals $20,500,000) and has a contingent liability estimated at $3,000,000 at the date of acquisition to acquire Legoria Co on January 1, 2022. In addition, Joey Co. paid $1,200,000 for Merger advisory services and $600,000 for stock registrations fees. Fair values of Legoria Co.’s reported assets and liabilities follow:

			Fair Value
Current Assets			$2,000,000
Plant and Equipment			60,000,000
Patents and Copyrights			5,000,000
Current Liabilities			10,000,000
Long Term Debt			40,000,000
In addition, Joey Co. identified, and valued Legoria Co’s previously unreported intangible assets as follows:
Brand Names			$1,000,000
Favorable Lease Agreements			600,000
Assembled workforce			5,000,000
In-process contracts with potential customers			2,000,000
Contractual customer relationships			3,000,000

Required:

1. Give the entry that Joey Co would record for this Merger to acquire Legoria on January 1, 2022.
2. Would Joey Co. be required to Consolidate Legoria at 12/31/2022 using the Consolidation Process we discussed in class on Wednesday 26 January 2022
   1. Yes Or No
   2. Briefly explain your answer in 2A above.
   3. If Consolidation was required, briefly discuss both the basic conceptual aspects and procedures of the Consolidation process.

Answer rating: 100% (QA)

Investment in Legoria Ac Dr 36 Million Goodwill Ac Dr 114 Million To Bank Ac 15 Mi... View the full answer