Prepare journal entries & stockholders' equity section The stockholders’ equities of Riyadh Corporation and Jeddah Corporation at January 1 were as follows: Riyadh Jeddah Capital stock, S10 par...

Purchase method


Extracted text: Prepare journal entries & stockholders' equity section The stockholders’ equities of Riyadh Corporation and Jeddah Corporation at January 1 were as follows: Riyadh Jeddah Capital stock, S10 par 3,000,000 1,600,000 Other paid-in capital 400,000 800,000 Retained earnings 1,200,000 600,000 Stockholders' equity 4,600,000 3,000,000 Additional Information: 1- On January 2, Riyadh issued 300,000 of its shares with a market value of $20 per share for all of Jeddah's shares, and Jeddah was dissolved. 2- On January 2, Riyadh paid S$10,000 to register and issue the shares. 3- On January 2, Riyadh paid $20,000 for other direct costs of combination. Required: 1- Prepare the journal entries to record the acquisition 2 - Prepare the stockholders’ equity section of Riyadh Corporation's balance sheet immediately after the acquisition on January 2.