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Journal Entries Acquisition Entries 010120X2Buildings 480000Patents 420000 Trademark 115000 Professional Service Exp 30000Goodwill 10000Note Payable 380000 Cash 335000Common Stock100000 APIC-Options 320000Subsequent Entries 110120X2Building 30000 Goodwill 30000Other Entries 020120X2Cash 245000Loss on Sale Patent 25000Patents 270000Analysis Acquisition January 1 20X2 Ballard Co purchased 100 of Queen Anne Corporation Following this acquisition Queen Anne will be fully dissolved so Ballard will record the acquired assets and assumed liabilities directly onto its balance sheet In order to help the valuation of these assets and liabilities Ballard hired a Certified Valuation Specialist CVS After a preliminary analysis a further more complete valuation will be completed at a later date he determined fair values of some of Queen Annes assets and liabilities Throughout this report I will analyze the acquisition and discuss how these transactions should be valued and recorded I will also dive deeper into some strategic moves Ballard can make based on their acquisition of Queen Anne During the valuation the CVS determined the trademark had a fair value of 115000 and it was recorded on Ballards balance sheet at that amount Ballard was given Queen Annes balance sheet at December 31 20X1 and trademark was valued at 80000 Ballard should record the 115000 because it coincides with the measurement principle in a business combination This measurement principle states the acquirer shall measure the assets acquired and liabilities assumed in the acquire at their acquisition date fair value 805-20-30-1 In order to comply with Financial Accounting Standards Board FASB we must adhere to this condition The acquisition determined that Ballard acquired leased office space from Queen Anne Office space is higher than current market conditions and in order to buy out the lease contract it would cost Ballard 75000 Ballard should explore options for leasing other space try to renegotiate the contract due to cost justification on different alternatives which may be more favorable A Note Payable account was recorded at fair value on Ballards balance sheet as
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