On January 1, 16, 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:
| Book Value | Fair Value | |
| Current Assets | $280,000 | $370,000 |
| Plant and Equipment | 440,000 | 480,000 |
| Accumulated Depreciation | (100,000) | |
| Intangibles – Patents | 80,000 | 120,000 |
| Current Liabilities | (140,000) | (140,000) |
| Long-Term Debt | (100,000) | (110,000) |
| Common Stock | (200,000) | |
| Other Paid-in Capital | (120,000) | |
| Retained Earnings | (140,000) |
Required: Record Brown’s purchase of Larson Company’s net assets.
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