The Blue Reef Company Purchased the Net Assets of the Pink

Essay

The Blue Reef Company purchased the net assets of the Pink Coral Company on January 1, 20X1, and made the following entry to record the purchase:
$$\begin{array} { l r r } \text { Current Assets } & 100,000 \\\text { Equipment } & 150,000 \\\text { Land } & 50,000 \\\text { Buildings } & 300,000 \\\text { Goodwill } & 100,000 & \\\quad \text { Liabilities } & & 80,000 \\\quad \text { Common Stock, } \$ 1 \text { Par } & & 100,000 \\\quad \text { Paid-in Capital in Excess of Par } & & 520,000\end{array}$$ Required:
Make the required entry on January 1, 20X3, assuming that additional shares would be issued on that date to compensate for any fall in the value of Blue Reef common stock below $16 per share. The settlement would be to cure the deficiency by issuing added shares based on their fair value on January 1, 20X3. The fair price of the shares on January 1, 20X3 was $10.