Do the problems using Microsoft Excel.

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

Book Value Fair Value

Inventory....................................... $ 630,000 $ 600,000

Land........................................... 750,000 990,000

Buildings....................................... 1,700,000 2,000,000

Customer relationships ................... 0 800,000

Accounts payable............................... (80,000) (80,000)

Common stock ................................. (2,000,000)

Additional paid-in capital......................... (500,000)

Retained earnings, 1/1........................... (360,000)

Revenues ...................................... (420,000)

Expenses ...................................... 280,000

Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common

stock (fair value of $50 per share) for all of Westmonts common stock in a merger, after which

Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,000 and Arturo

pays $42,000 for legal fees to complete the transaction.

Prepare Arturos journal entries to record its acquisition of Westmont.

2) Use the same facts as in problem (1), but assume instead that Arturo pays cash of $4,200,000 to acquire Westmont. No stock is issued.

Prepare Arturos journal entries to record its acquisition of Westmont.