On December 31,20X6,the Statements of Financial Position of the Power

Essay

On December 31,20X6,the statements of financial position of the Power Company and the Pro Company are as follows: (in 000s)
Power Company has 100,000 shares of common stock outstanding.Pro Company has 45,000 shares outstanding.On January 1,20X7 Power issued an additional 90,000 shares of common stock in exchange for all the outstanding shares of Pro.All assets and liabilities have book value equal to fair values,except as noted.In addition,Pro has a patent that has an appraised fair value of $450.
Market value of the new shares issued was $95 per share at the date of acquisition.
Required: What is the amount of goodwill to be recorded for this business combination? Prepare the journal entry that Power would record on January 1,20X7 related to this acquisition.Prepare the consolidated statement of financial position as at January 1,20X7.