ui sit EXERCISES Exercise 1 (LO23, 4) Asset versus stock acquisition. Barstow Company is contemplat ing the acquisition of the net assets of Crown Company for $875,000 cash. To complete the transaction, acquisition costs are $15,000. The balance sheet of Crown Company on the pur- chase date is as follows: ri of Crown Company December 31, 2015 Assets Liabilities and Equity 80,000 Liabilities 5 $100,000 assets .. .. Land 70,000 Common stock ($10 par)... 100,000 .. . 450,000 Paid-in capital in excess of par 150,000 250,000 Accumulated depreciation-building . (200,000) Retained earnings 300,000 Accumulated depreciation equipment.(100,000) Equipment... ate Total assets. .. $ 600,000Total liabilities and equity $600,000 The following fair values have been obtained for Crown's identifiable assets and liabilities: Current assets Land Buildin Equipment $ 85,000 90,000 300,000 275,000 102,000 1. Record the acquisition of the net assets of Crown Company on Barstow Company's books. 2. Record the sale of the net assets on the books of Crown Company. 3. Record the acquisition of 100% of the common stock of Crown Company on Barstow s books. Crown Company will remain a separate legal 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 $1 par stock, with a fair value