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On January 1, 2019, North Corporation acquired all of South Corporation's outstanding stock for $400,000. North paid $200,000 in cash and issued a three year 8 percent note for the balance. South Corporation was dissolved. Relevant balance sheet information for North and South Corporations on December 31, 2018 just before the combination is as follows (in thousands): South North Historical Historical Cost Cost South Fair Value Assets Cash 215 50 Receivables - net Inventories Land 110 50 5 15 70 50 110 95 50 210 150 100 170 200 785 345 540 50 Equipment - net Total assets Accounts Payable Other liabilities Capital Stock, $10 par Additional paid-in-capital Retained earning Total liabilities and owner's equity 110 400 80 115 785 140 70 45 345 Required 1. Prepare the Preliminary Calculations to determine the amount of goodwill or gain on bargain purchase, if any. 2. Prepare all of the journal entries to record the acquisition of South (show all of your work and place your calculations in the cells.) 3. Prepare a balance sheet for North Corporation immediately after the acquisition. (January 1, 2019) Prepare the worksheet to combine the balance sheet before you prepare the balance sheet. 1. Preliminary Calculations To Calculate Gain or Goodwill FV of Net Assets Acquired Purchase Price 430,000 400,000 Gain on Purchase 30,000 check figure is again of 30 2. Journal Entries to record the acquisition of South. Investment in South Corporation Common Stock, $10 par Addition Paid-In-Capital To record the payment of $200,000 in cash and a $200,000 note to acquire South Corporation

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