The following book and fair values were available for Westmont Company as of March 1. Inventory...

Transcribed Image Text:

The following book and fair values were available for Westmont Company as of March 1. Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Book Value Fair Value $ 692,500 $ 643,750 757,500 1,047,750 1,755,000 2,073,750 0 804,750 TV (102,000) (102,000) (2,000,000) (500,000) (434,500) (488,500) 320,000 Arturo Company pays $3,580,000 cash and issues 29,800 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont's common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $28,200 and Arturo pays $49,100 for legal fees to complete the transaction. Prepare Arturo's journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) The following book and fair values were available for Westmont Company as of March 1. Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Book Value Fair Value $ 692,500 $ 643,750 757,500 1,047,750 1,755,000 2,073,750 0 804,750 TV (102,000) (102,000) (2,000,000) (500,000) (434,500) (488,500) 320,000 Arturo Company pays $3,580,000 cash and issues 29,800 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont's common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $28,200 and Arturo pays $49,100 for legal fees to complete the transaction. Prepare Arturo's journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer rating: 100% (QA)

This appears to be a question related to accounting specifically dealing with the journal entries required for a business combination where one compan... View the full answer