On July 1, 2023, Howe Corporation issues 2,000,000 shares of its common stock for all of EssexCorporation's outstanding shares and Essex is dissolved. The fair value of Howe's common stockon that date is $100 per share. The book values and fair values of the accounts for each corporationat March 1, 2019 are as follows:AssetsCashAccounts receivable - netInventoriesOther current assetsPlant assetsAccumulated depreciationTotal assetsLiabilities and Stockholders' EquityAccounts payableLong-term debtCommon stock ($1 par)Additional paid-in capitalRetained earningsTotal equitiesHowe CorporationBook Value$ 25,000,0003,000,00010,000,0005,000,00015,000,000-6,000,000$ 52,000,000Fair Value$ 25,000,0004,000,0008,000,0009,000,00021,000,000$ 14,000,000 $ 14,000,00010,000,00011,500,00015,000,0005,000,0008,000,000$ 52,000,000Essex CorporationFair ValueBook Value$80,000,000$80,000,00020,000,00020,000,00020,000,000 25,000,00010,000,0009,000,000150,000,000110,000,000-45,000,000$ 235,000,000$30,000,000 $30,000,00050,000,000 46,000,000120,000,00010,000,00025,000,000$ 235,000,000Required: Prepare both (a) the journal entry to record the business combination and (b) the balancesheet (in good form as discussed in class) of Howe Corporation on July 1, 2023 after the combination.

In case one company overtake the assets and liabilities of another company, then accounting for…

Required: Prepare both (a) the journal entry to record the business combination and (b) the balance sheet (in good form as discussed in class) of Howe Corporation on July 1, 2023 after the combination.

Required: Prepare both (a) the journal entry to record the business combination and (b) the balance sheet (in good form as discussed in class) of Howe Corporation on July 1, 2023 after the combination.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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