Plant acquisitions for selected companies are as follows. 1. Sarasota Corporation purchased a company car by making a $4,680 cash down payment and signing a 1-year, $20,800, 10% note payable. The purchase was recorded as follows. Automobiles 27,560 Cash 4,680 Notes Payable 20,800 Interest Payable 2,080 2. As an inducement to locate its new branch office in the city of Greenwood Acres, Ivanhoe Co. received land and a building from the city at no cost. The appraised value of the land was $52,000. The appraised value of the building was $182,000. Since it paid nothing for the land and building, Ivanhoe Co. made no journal entry to record the transaction. 3. Bonita Corporation purchased warehouse shelving for $104,000, terms 1/10, n/30. At the purchase date, Bonita intended to take the discount. Therefore, it made no entry until it paid for the acquisition. The entry was: Warehouse fixtures 104,000 Cash 102,960 Purchase Discounts 1,040 4. Pharoah Company built a piece of equipment for its factory. The cost of constructing the equipment was $166,400. Pharoah could have purchased the equipment for $197,600. The controller made the following entry. Equipment 197,600 Cash, Materials, etc. 166,400 Profir on Construction 31,200 5. Metlock Inc. acquired land, buildings, and equipment from Sale Corp., for a lump-sum price of $1,040,000. The book values of the assets on Sale’s books at the date of purchase, as well as fair values for the assets, based on an appraisal performed shortly before the purchase, were as follows. Asset Book Value Fair Value Land $260,000 $364,000 Buildings 468,000 676,000 Equipment 520,000 312,000 Total $1,248,000 $1,352,000 The company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 260,000 Buildings 468,000 Equipment 312,000 Cash 1,040,000

Plant acquisitions for selected companies are as follows. 1. Sarasota Corporation purchased a company car by making a $4,680 cash down payment and signing a 1-year, $20,800, 10% note payable. The purchase was recorded as follows. Automobiles 27,560 Cash 4,680 Notes Payable 20,800 Interest Payable 2,080 2. As an inducement to locate its new branch office in the city of Greenwood Acres, Ivanhoe Co. received land and a building from the city at no cost. The appraised value of the land was $52,000. The appraised value of the building was $182,000. Since it paid nothing for the land and building, Ivanhoe Co. made no journal entry to record the transaction. 3. Bonita Corporation purchased warehouse shelving for $104,000, terms 1/10, n/30. At the purchase date, Bonita intended to take the discount. Therefore, it made no entry until it paid for the acquisition. The entry was: Warehouse fixtures 104,000 Cash 102,960 Purchase Discounts 1,040 4. Pharoah Company built a piece of equipment for its factory. The cost of constructing the equipment was $166,400. Pharoah could have purchased the equipment for $197,600. The controller made the following entry. Equipment 197,600 Cash, Materials, etc. 166,400 Profir on Construction 31,200 5. Metlock Inc. acquired land, buildings, and equipment from Sale Corp., for a lump-sum price of $1,040,000. The book values of the assets on Sale’s books at the date of purchase, as well as fair values for the assets, based on an appraisal performed shortly before the purchase, were as follows. Asset Book Value Fair Value Land $260,000 $364,000 Buildings 468,000 676,000 Equipment 520,000 312,000 Total $1,248,000 $1,352,000 The company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 260,000 Buildings 468,000 Equipment 312,000 Cash 1,040,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Automobiles	27,560
Cash		4,680
Notes Payable		20,800
Interest Payable		2,080

2. As an inducement to locate its new branch office in the city of Greenwood Acres, Ivanhoe Co. received land and a building from the city at no cost. The appraised value of the land was $52,000. The appraised value of the building was $182,000. Since it paid nothing for the land and building, Ivanhoe Co. made no journal entry to record the transaction.

3. Bonita Corporation purchased warehouse shelving for $104,000, terms 1/10, n/30. At the purchase date, Bonita intended to take the discount. Therefore, it made no entry until it paid for the acquisition. The entry was:

Warehouse fixtures	104,000
Cash		102,960
Purchase Discounts		1,040

4. Pharoah Company built a piece of equipment for its factory. The cost of constructing the equipment was $166,400. Pharoah could have purchased the equipment for $197,600. The controller made the following entry.

Equipment	197,600
Cash, Materials, etc.		166,400
Profir on Construction		31,200

5. Metlock Inc. acquired land, buildings, and equipment from Sale Corp., for a lump-sum price of $1,040,000. The book values of the assets on Sale’s books at the date of purchase, as well as fair values for the assets, based on an appraisal performed shortly before the purchase, were as follows.

Asset	Book Value	Fair Value
Land	$260,000		$364,000
Buildings	468,000		676,000
Equipment	520,000		312,000
Total	$1,248,000		$1,352,000

The company decided to take the lower of the two values for each asset acquired. The following entry was made.

Land	260,000
Buildings	468,000
Equipment	312,000
Cash		1,040,000

The image depicts a part of an educational exercise, labeled with the number "5." It consists of three columns, each containing three fields that appear to be dropdown menus, indicated by downward-facing arrows. The dropdowns are likely intended for selection of specific options related to an exercise or quiz. There are no graphs or diagrams present in the image.

**Instructions for Preparing Entries for Acquisitions**

This table is designed for entering accounting transactions related to acquisitions. Follow the steps below to ensure accurate recording:

**Header Text:**
- "Prepare the entry that should have been made at the date of each acquisition. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)"

**Table Structure:**

1. **Columns:**
- **No.**: The sequential number of the entry.
- **Account Titles and Explanation**: Dropdown selection for account names and a field for explanation.
- **Debit**: Input field for the debit amount.
- **Credit**: Input field for the credit amount.

2. **Rows (Numbered 1 to 4):**
- Each row corresponds to a separate acquisition entry.
- Each row provides fields to select and fill in appropriate account details and amounts.

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