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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