I. On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: Minor Company Balance Sheet wwww Assets Liabilities and Owners' Eguity $40,000 $55,000 280,000 $335,000 Cash Notes Payable Capital Acc. Receivable 80,000 Inventory 120,000 Buildings(net) Equipment(net) Patents Trademarks 50,000 30,000 5,000 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp.
I. On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: Minor Company Balance Sheet wwww Assets Liabilities and Owners' Eguity $40,000 $55,000 280,000 $335,000 Cash Notes Payable Capital Acc. Receivable 80,000 Inventory 120,000 Buildings(net) Equipment(net) Patents Trademarks 50,000 30,000 5,000 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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