spatele entity. Exercise 2 (LO 3, 4) Acquisition with goodwill Smith Company is acquired by Roan Corporation on July 1, 2015. Roan exchanges 60.000 shares of its Sl par stock, with a fair value of $18 per share, for the net assets of Smith Company. Roan incurs the following costs as a result of this transaction: Acquisition costs ....................... ...... $25,000 Stock registration and issuance costs............... 10,000 Total costs ................................... $35,000 The balance sheet of Smyth Company, on the day of the acquisition, is as follows: Smith Company Balance Sheet July 1, 2015 Assets $ 100,000 250,000 $ 580,000 Cash ............ Inventory .................. Property, plant, and equipment: Land.. Buildings (net) ............ Equipment (not) ........... Total assets Liabilities and Equity Current liabilities ................ $ 80,000 Bonds payable ................. 500,000 Stockholders' equity: Common stock................... $200,000 Paid-in capital in excess of par... 100,000 Retained earnings ............. 120,000 Total liabilities and equity......... $200,000 250,000 200,000 650,000 $1,000,000 420,000 $1,000,000 Part 1 COMBINED CORPORATE ENTITIES AND CONSOLIDATIONS The appraised fair values as of July 1, 2015, is as follows: Inventory ............. Equipment................ Land. . . . . . . . . . . . . . . . . . Buildings .............. Current liabilities.. Bonds payable ......... $270,000 220,000 180,000 300,000 80,000 425,000 Record the acquisition of Smyth Company on the books of Radar Corporation. 11. com