(Solution) - On September 1 2014 Sunshine Ltd acquired all the assets -(2025 Original AI-Free Solution)

Paper Details

On September 1, 2014, Sunshine Ltd. acquired all the assets (with the exception of cash) and liabilities of Moonbeam Ltd. Under the terms of acquisition, Moonbeam shareholders received 3 Class A Sunshine Ltd. shares plus $2.00 cash for every four shares of Moonbeam. At the acquisition date, Sunshine's Class A shares were valued at $2.50 per share. Sunshine had agreed to cover Moonbeam's estimated liquidation costs of $10,000. The $1,500 of cash in Moonbeam's bank at the acquisition date will go towards paying these costs. The statements of financial position at the acquisition date are as follows:

Items not reflected in Moonbeam's statement of financial position:
Contingent liability related to a loan guarantee was reported in the notes to the financial statements and has a fair value of $2,000.
Moonbeam had expensed $15,000 in research and development costs in the past year. At the acquisition date, Sunshine has determined that the value of the research in progress is $3,000.
Sunshine's statement of financial position does not include $5,000 in fees for valuation and accounting advice related to the acquisition of Moonbeam. Sunshine expects to pay these fees shortly.
Required:
1. Prepare the acquisition analysis and calculate the goodwill.
2. Prepare all the journal entries in Sunshine's books to record the acquisition of Moonbeam.
3. Prepare Sunshine's statement of financial position immediately following the acquisition.