Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately prior to the acquisition, Saville Company€™s balance sheet was as follows:

Required:
A. Prepare the journal entries on the books of Preston Company to record the purchase of the assets and assumption of the liabilities of Saville Company if the amount paid was $1,560,000 in cash.
B. Repeat the requirement in (A) Assuming that the amount paid was$990,000.

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Book Value Fair Value 120,000 192,000 360,000 480,000 420,000 $1.572,000 540,000 480,000 132,000 420,000 $1,572,000 120,000 228,000 396,000 540,000 660,000 $1,944,000 Gash Receivables (net) Inventory Plant and equipment (net) Land Total assets Liabilities Common stock ($5 par value) Other contributed capital Retained earnings 594,000 Total equities