I need help solving Exercise 2 in my Advanced Accounting Cla

I need help solving Exercise 2 in my Advanced Accounting Class.

books. Crown Company will Pemal 2 Exercise 2 (O 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 of $18 per share, for the net assets of Smith Company. Roan incurs the following costs as a result of this transaction: Acquisition costs.. Stock registration and issuance costs. . .. . . . . ..$25,000 10,000 $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 Liabilities and Equity $100,000 Current liabilities . . . . 80,000 Cash Inventory . Property, plant, and equipment: 500,000 $ 580,000 Stockholders\' equity: Land. Buildings (net) Equipment Inef] . $200,000 250,000 200,000 Common stock. $200,000 100,000 120,000 Paid-in capital in excess of par 650,000 Retained earnings $1,000,000 Total liabilities and equity... 420,000 $1,000,000 Total assets

Solution

Books of Radar Corporation : journal entries of acquisition on July 1, 2015: Debit $ Credit $ 1-Jul-15 Acquisition of Smith Co.(60000*18) 1080000 Common Stock (60000*1) 60000 Paid in capital in excess of par - CS 1020000 (Acquisition of smith co.) 1-Jul-15 Cash 100000 Inventory (fair value) 270000 Land 220000 Building 300000 Goodwill 695000 Current Liabilities (fair value) 80000 Bonds payable 425000 Acquisition of Smith Co. 1080000 (being raising the goodwill on the acquisition of Smith)