On June 30, 2021, Streeter Company reported the following account balances:

Receivables	$	50,700	Current liabilities	$	(15,800	)
Inventory		87,750	Long-term liabilities		(51,250	)
Buildings (net)		84,100	Common stock		(90,000	)
Equipment (net)		34,500	Retained earnings		(100,000	)
Total assets	$	257,050	Total liabilities and equities	$	(257,050	)

On June 30, 2021, Princeton Company paid $309,000 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $14,200 in legal fees. Princeton also agreed to pay $54,500 to the former owners of Streeter contingent on meeting certain revenue goals during 2022. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $19,300.

In determining its offer, Princeton noted the following pertaining to Streeter:

• It holds a building with a fair value $41,200 more than its book value.
• It has developed a customer list appraised at $24,500, although it is not recorded in its financial records.
• It has research and development activity in process with an appraised fair value of $36,000. However, the project has not yet reached technological feasibility and the assets used in the activity have no alternative future use.
• Book values for the receivables, inventory, equipment, and liabilities approximate fair values.

Prepare Princeton’s accounting entries to record the combination with Streeter.

Answer rating: 100% (QA)

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