Question: This exercise shows the similarity and the difference between two

This exercise shows the similarity and the difference between two ways to acquire
plant assets.
Case A—Issue stock and buy the assets in separate transactions:
Arthur, Inc., issued 14,000 shares of its $10 par common stock for cash of $600,000. In a separate transaction, Arthur, Inc., purchased a building for $525,000 and equipment for $75,000. Journalize the two transactions.
Case B—Issue stock to acquire the assets:
Arthur, Inc., issued 14,000 shares of its $10 par common stock to acquire a building with a fair market value of $525,000 and equipment with a fair market value of $75,000. Journalize this single transaction.
Compare the balances in all accounts after making both sets of entries. Are the
account balances similar or different?



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  • CreatedApril 29, 2014
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