Question: Landers Inc. is considering purchasing J&B Properties, which has the following assets and liabilities. 1. Make the journal entry necessary for Landers Inc. to record

Landers Inc. is considering purchasing J&B Properties, which has the following

Landers Inc. is considering purchasing J&B Properties, which has the following assets and liabilities.

1. Make the journal entry necessary for Landers Inc. to record the purchase if the purchase price is $650,000 cash.

Check Figure: Goodwill = $140,000 (debit)

2. Assume that the purchase price is $320,000 cash. Make the journal entry necessary to record the purchase.

Accounts receivable. Inventory. Prepaid insurance Buildings and equipment (net) Accounts payable Net assets Fair value Cost 210,000 200,000 260,000 250,000 12,000 12,000 88,000 168,000 (30,000) S 430,000 510,000

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