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The following book and fair values were available for NorthStar Company as of March 1. BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction. Required: Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks.

The following book and fair values were available for NorthStar Company as of March 1. BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction. Required: Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following book and fair values were available for NorthStar Company as of March 1.

BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction.

 

Required:

 

Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks.

Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Book value $ 630,000 750,000 1,700,000 -0- (80,000) (2,000,000) (500,000) (360,000) (420,000) 280,000 Fair value $ 600,000 990,000 2,000,000 800,000 (80,000)
Transcribed Image Text:Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Book value $ 630,000 750,000 1,700,000 -0- (80,000) (2,000,000) (500,000) (360,000) (420,000) 280,000 Fair value $ 600,000 990,000 2,000,000 800,000 (80,000)
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