Question: This exercise shows the similarity and the difference between two ways to acquire plant assets. Case A-Issue stock and buy the assets in separate transactions:

This exercise shows the similarity and the difference between two ways to acquire plant assets.

Case A-Issue stock and buy the assets in separate transactions:

Apex, Inc., issued 10,000 shares of its $10 par common stock for cash of $600,000. In a separate transaction, Apex, Inc. purchased a building for $475,000 and equipment for $125,000 and paid cash. Journalize the two transactions.

Case B-Issue stock to acquire the assets:

Apex, Inc., issued 10,000 shares of its $10 par common stock to acquire a building with a fair market value of $475,000 and equipment with a fair market value of $125,000. Journalize this single transaction.

Compare the balances in all accounts after making both sets of entries. Are the account balances similar or different?

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