Weakfish Company purchased 100% of Squeteague Company on January 1, 2020 for $950,000 by issuing 200,000...

 

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Weakfish Company purchased 100% of Squeteague Company on January 1, 2020 for $950,000 by issuing 200,000 shares of its $2 par common stock. The book value of Squeteague at the time was $800,000 with the excess attributed to goodwill and equipment equally. There were direct expenses $10,000 and indirect expenses of $40,000. The purchase is an acquisition or consolidation. Assume that the balance sheets immediately after the acquisition are below. Show the elimination/consolidation entries to put them together on the worksheet. Do not extend the balances. Weakfish Squeteague Dr. Cr. Cash $ 100,000 $ 50,000 Receivables 50,000 20,000 Investment in S. 950,000 Property & Equipment 600,000 830,000 Goodwill $1,700,000 $90,000 Liabilities Payables $ 250,000 $ 100,000 Capital Stock 500,000 400,000 Additional Paid in Cap 800,000 Retained Earnings 150,000 400,000 $1,700,000 $ 900,000 Weakfish Company purchased 100% of Squeteague Company on January 1, 2020 for $950,000 by issuing 200,000 shares of its $2 par common stock. The book value of Squeteague at the time was $800,000 with the excess attributed to goodwill and equipment equally. There were direct expenses $10,000 and indirect expenses of $40,000. The purchase is an acquisition or consolidation. Assume that the balance sheets immediately after the acquisition are below. Show the elimination/consolidation entries to put them together on the worksheet. Do not extend the balances. Weakfish Squeteague Dr. Cr. Cash $ 100,000 $ 50,000 Receivables 50,000 20,000 Investment in S. 950,000 Property & Equipment 600,000 830,000 Goodwill $1,700,000 $90,000 Liabilities Payables $ 250,000 $ 100,000 Capital Stock 500,000 400,000 Additional Paid in Cap 800,000 Retained Earnings 150,000 400,000 $1,700,000 $ 900,000

Answer rating: 100% (QA)

Journal Entries Req Date Accounts Debit Credit A 1Jan20 Investment in S 950000 Common Stock 400000 ... View the full answer