P1-5 Journal entries and balance sheet for an acquisition Ling Corporation decided to acquire all of Huang Corporation's voting common stock on January 1, 2017. The purchase price consisted of $\$ 10,000$ for the registering and issuing of 10,000 shares of Ling Corporation. The market value of the issuance of these shares is $\$ 300,000$. The purchase price also includes $\$ 30,000$ for accounting and legal fees. However, Ling is undecided on the additional amount of cash to be paid. Balance sheet information for the companies on December 31, 2016, is summarized as follows (in thousands): \begin{tabular}{lrrrr} \multicolumn{4}{c}{ Ling } & \multicolumn{3}{c}{ Huang } \\ \hline & Book Value & Fair Value & Book Value & Fair Value \\ \hline Assets & & & & \\ Cash & $\$ 1,000$ & $\$ 1,000$ & $\$ 50$ & $\$ 50$ \\ Receivables-net & 750 & 1,000 & 25 & 50 \\ Inventories & 1,500 & 2,000 & 75 & 100 \\ Land & 1,000 & 1,500 & 50 & 100 \\ Buildings-net & 2,000 & 3,000 & 75 & 100 \\ Equipment-net & $\underline{1,500}$ & 1,500 & $\underline{75}$ & $\underline{100}$ \\ Total assets & $\underline{\underline{\$ 7,750}}$ & $\underline{\underline{\$ 10,000}}$ & $\underline{\underline{\$ 350}}$ & $\underline{\underline{\$ 500}}$ \\ Equities & $\$ 800$ & $\$ 800$ & $\$ 50$ & $\$ 50$ \\ Accounts payable & 1,000 & 900 & 75 & 75 \\ Other liabilities & 3,000 & & 100 & \\ Common stock, \$10 par & 1,200 & & 50 & \\ Other paid-in capital & $\underline{1,750}$ & & $\underline{750}$ & \\ Retained earnings & $\underline{\underline{\$ 7,750}}$ & & $\underline{\underline{\$ 3}}$ & \end{tabular} Business Combinations 49 REQUIRED 1. Prepare journal entries and a balance sheet for Ling Corporation immediately after the acquisition if it decides to include $\$ 50,000$ of cash in the purchase price. 2. Prepare journal entries and a balance sheet for Ling Corporation immediately after the acquisition if it decides to include $\$ 100,000$ of cash in the purchase price.