On April 1, 2012, the Balance Sheets of Optimum Inc

Essay

On April 1, 2012, the balance sheets of Optimum Inc. and Electra Inc. were as follows: On that date, the fair values of Electra's Assets and Liabilities were as follows: On April 1, 2012, Optimum issued 5,000 new common shares with a market value of $50.00 per share as consideration for Electra's net assets. Prior to the issue, Optimum had 10,000 outstanding common shares. a) Calculate the amount of Goodwill arising from this combination. b) Prepare the journal entry to record Optimum's acquisition of Electra's assets. c) Prepare Optimum's Consolidated Balance Sheet immediately following its acquisition of Electra's assets. d) Prepare Electra's Balance Sheet following the acquisition.