On January 1, 20X5, Brown Inc Required:
Record Brown's Purchase of Larson Company's Net Assets

Essay

On January 1, 20X5, Brown Inc. acquired Larson Company's net assets in exchange for Brown's common stock with a par value of $100,000 and a fair value of $800,000. Brown also paid $10,000 in direct acquisition costs and $15,000 in stock issuance costs.
On this date, Larson's condensed account balances showed the following:
$$\begin{array} { l r r } & \text { Book Value } & \text { Fair Value } \\\text { Current Assets } & \$ 280,000 & \$ 370,000 \\\text { Plant and Equipment } & 440,000 & 480,000 \\\text { Accumulated Depreciation } & ( 100,000 ) & \\\text { Intangibles - Patents } & 80,000 & 120,000 \\\text { Current Liabilities } & ( 140,000 ) & ( 140,000 ) \\\text { Long-Term Debt } & ( 100,000 ) & ( 110,000 ) \\\text { Common Stock } & ( 200,000 ) & \\\text { Other Paid-in Capital } & ( 120,000 ) & \\\text { Retained Earnings } & ( 140,000 ) &\end{array}$$ Required:
Record Brown's purchase of Larson Company's net assets.