Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel Galleries. The following balance sheet of Zweifel is given in an abbreviated form as follows.

Moss and Zweifel agree that:

1. Land is undervalued by $30,000.

2. Equipment is overvalued by $5,000.

Zweifel agrees to sell the gallery to Moss for $350,000.

Instructions

Prepare the entry to record the purchase of Zweifel Galleries on Moss?s books.

Transcribed Image Text:

Zweifel Galleries Balance Sheet As of December 31, 2020 Liabilities and Stockholders' Equity Accounts payable Notes payable (long-term) Total liabilities Common stock Retained earnings Total liabilities and stockholders' equity Assets $100,000 $ 50,000 Cash Land Buildings (net) Equipment (net) Copyrights (net) Total assets 70,000 300,000 350,000 200,000 $200,000 175,000 30,000 225,000 25,000 $575,000 $575,000