ABC

Cash 185,000
Shares (198,500 x 40) 7,940,000
TOTAL 8,125,000
Total assets 10,250,000
Liabilities (2,775,000) 7,475,000
GOODWILL OF ABC 650,000

XYZ
Cash 72,000
Shares (54,350 x 40) 2,174,000
TOTAL 2,246,000
Total assets 3,057,500
Liabilities (800,000) 2,257,500
GOODWILL OF XYZ (11,500)

GOODWILL 638,500

Expenses (296,250)
Gain on Bargain Purchase 11,500
Net increase(decrease) in retained earnings (284,750)

Shares:
ABC 7,940,000
XYZ 2,174,000
Expenses (296,250)
Gain on Bargain Purchase 11,500
APIC (925,000)
Net increase (decrease) in the shareholders’ equity of AAA 8,904,250

ABC 10,250,000
XYZ 3,057,500
Cash payment - ABC (185,000)
Cash payment - XYZ (72,000)
Net increase (decrease) in the identifiable assets of AAA 13,050,500
Goodwill

Gain on Bargain Purchase

GOODWILL RECOGNIZED AT THE ACQUISITION DATE

Indirect cost and finder's fee of ABC

Accounting and legal fees and printing stock