Purchase vs pooling method for Goodwin

"ACC 401 Chapter 2
"

The financial statements for the year ended December 31, 2003:

GOODWIN CORR
INCOME STATEMENT
Revenue $2,700,000 $600,000
Expenses 1,980,000 400,000
Net income $720,000 $200,000
RETAINED EARNINGS STATEMENT
Beginning retained earnings $2,400,000 $400,000
Net income 720,000 200,000
Dividends 270,000 -
Ending retained earnings $2,850,000 $600,000
BALANCE SHEET
Cash $240,000 $220,000
Receivables & inventories 1,200,000 340,000
Buildings, net 2,700,000 600,000
Equipment, net 2,100,000 1,200,000
Total assets $6,240,000 $2,360,000

Liabilities $1,500,000 $820,000
Common stock 1,080,000 400,000
Additional paid-in capital 810,000 540,000
Retained earnings 2,850,000 600,000
Total liabilities & equity $6,240,000 $2,360,000

Additional information:
1. On December 31, 2003, Goodwin issued common stock:
PAR VALUE MARKET VALUE
SHARES PER SHARE PER SHARE
30,000 $10.00 $40.00 and issued debt of $600,000
to purchase all of the outstanding shares of that Corr company.

2. Goodwin paid: $25,000 to a broker for arranging the transaction, and
$35,000 in stock issuance costs

3. The fair market value of two assets were not equal to book value:
ASSETS FMV
EQUIPMENT $1,400,000 undervalued on the books
BUILDING $560,000 overvalued on the books

REQUIRED:
Using the purchase method:
Part a - If Goodwin purchased the net assets of Corr, determine the fair market value of the net assets
acquired and any goodwill. Make the journal entries to record the purchase.

Part b - If Goodwin purchased the ownership of the stock and the corporation remain as legally separate
entities, make the journal entries to record the combination. Also create a worksheet showing the consolidated
balance sheet as of the acquisition date.

Using the Pooling Method: (Try this but don't spend a good deal of time)
Part c - If Goodwin purchased the ownership of the stock and the corporations remain as legally separate
entities, make the journal entries to record the combination. Also, create a worksheet showing the consolidated
balance sheet and income statement as of the acquisition date.