MNO acquired the net assets of STW. At the time of acquisition, STW's balance sheet was as
Question:
MNO acquired the net assets of STW. At the time of acquisition, STW's balance sheet was as follows:
Accounts receivable $140,000
Inventory 80,000
Equipment, net 40,000
Building, net 270,000
Land 150,000
Total assets $680,000
Bonds payable $100,000
Common stock 50,000
Retained earnings 450,000
Total liabilities and shareholders' equity $060.00
Fair values at acquisition date (book value and fair values are the same for receivables):
Inventory $110,000
Equipment 30,000
Building 370,000
Land 130,000
Brand 60,000
Bonds payable 120,000
Costs Purchase Cost: $7,000
Required:
Record entry for the purchase of STW's net assets at the following spot prices:
a. $800,000
b. $310,000
Federal Taxation 2021 Corporations, Partnerships, Estates & Trusts
ISBN: 9780135919460
34th Edition
Authors: Timothy J. Rupert, Kenneth E. Anderson, David S. Hulse