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Problem 1

Balance Sheets January 1, 20X3
	Plus	Spar
Cash	$140,000	$70,000
Accounts Receivable	170,000	110,000
Inventory	250,000	180,000
Land	80,000	100,000
Buildings & Equip (net)	360,000	220,000
Goodwill	70,000	20,000
Total Assets	$1,070,000	$700,000
Accounts Payable	70,000	195,000
Bonds Payable	320,000	100,000
Bond Premium		10,000
Common Stock	120,000	150,000
Additional Paid in Cap	170,000	60,000
Retained Earnings	390,000	185,000
Total Liabilities & Equities	$1,070,000	$700,000

Plus, and Spar agreed to combine as of January 1, 20X3. To effect the merger, Plus paid finders fees of $30,000 and legal fees of $24,000. Plus also paid $15,000 of audit fees related to the issuance of stock, stock registration fees of $8,000, and stock listing application fees of $6,000. On January 1, 20X3, book values of Spar Companys assets and liabilities approximated market value except for inventory with market value of $200,000, buildings and equipment with a market value of $350,000, and bonds payable with a market value of $105,000. All assets and liabilities were immediately recorded on Pluss books.

Required:

Give all journal entries that Plus recorded assuming Plus issues 40,000 shares of $8 par value common stock to acquiree all of Spars assets and liabilities in a business combination. Plus, common stock was trading at $14 per share on January 1, 20X3

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