Thorn Company acquires Underbrush Company for 2,000,000 shares of $0.50 par common stock with a market price of $l5/share. Underbrush has the following assets and liabilities reported on its balance...

Thorn Company acquires Underbrush Company for 2,000,000 shares of $0.50 par common stock with a market price of $l5/share. Underbrush has the following assets and liabilities reported on its balance sheet at the date of acquisition: Following are previously unreported assets identified as belonging to Underbrush: Contracts under negotiation with potential customers ……………………$ 5,000,000 In-process research & development…………………………………………2,500,000 Patent rights…………………………………………………………………3,000,000 Skilled workforce ………………………………………………………….10,000,000 Required Prepare the journal entry to record the acquisition on Thorn’s books, as a statutory merger. View Solution:

Thorn Company acquires Underbrush Company for 2 000 000 shares of 0 50