Telecom Inc Has Decided to Purchase the Shares of Intron

question 16

Essay

Telecom Inc has decided to purchase the shares of Intron Inc. for $300, 000 in Cash on July 1, 2018. On the date, the balance sheets of each of these companies were as follows: $$\begin{array} { | l | l | l | } \hline & \text { Telecom Inc } & \text { Intron Inc } \\\hline & & \\\hline \text { Cash and Short-Term Securities } & \$ 920,000 & \$ 200,000 \\\hline \text { Inuentory } & \$ 150,000 & \$ 20,000 \\\hline \text { Plant and Equipment (net) } & \$ 330,000 & \$ 180,000 \\\hline \text { Total Assets } & \$ 1,400,000 & \$ 400,000 \\\hline & & \\\hline \text { Current Liabilities } & \$ 420,000 & \$ 90,000 \\\hline \text { Bonds Payable } & \$ 700,000 & \$ 200,000 \\\hline \text { Common Shares } & \$ 180,000 & \$ 60,000 \\\hline \text { Retained Earnings } & \$ 100,000 & \$ 50,000 \\\hline \text { Total Labilities and Equiby } & \$ 1,400,000 & \$ 400,000 \\\hline\end{array}$$ On that date, the fair values of Intron's assets and liabilities were as follows:
$$\begin{array} { | l | l | } \hline \text { CashiShort-Term Securities } & \$ 200,000 \\\hline \text { Inventory } & \$ 15,000 \\\hline \text { Plant and Equipment (net) } & \$ 250,000 \\\hline \text { Current Liabilities } & \$ 90,000 \\\hline \text { Bonds Payable } & \$ 210,000 \\\hline\end{array}$$ Required:
Assume that Intron's assets and liabilities were purchased instead of its shares for $300,000. Prepare the journal entry to record this purchase.

---

Definitions:

Method

A function or a procedure in programming languages that is associated with a class or object and performs a specific task.

Object-oriented Design

A programming philosophy based on the concept of "objects," which are data structures encapsulating data and functions.

Verbs

Words that express actions or states of being.

Objects

Instances of classes that encapsulate data and functionality, acting as the basic building blocks of object-oriented programming.