Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2021, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts: BookValues FairValues Current assets$53,500 $53,500 Building 93,750 47,750 Land 24,250 41,250 Trademark 0 39,300 Goodwill 20,000 ? Liabilities (56,500) (56,500)Common stock (100,000) Retained earnings (35,000) 1&2. Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $167,000 and $104,500. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)Record the acquisition of Delex assuming the cash exchange of $167,000.Record the acquisition of Delex assuming the cash exchange of $104,500.

FV of assets=Current assets+Building+Land+Trademark=$53,500+$47,750+$41,250+$39,300=$181,800

Answered: Allerton Company acquires all of Deluxe…

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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Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2021, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:

	Book Values		Fair Values
Current assets	$	53,500		$	53,500
Building		93,750			47,750
Land		24,250			41,250
Trademark		0			39,300
Goodwill		20,000			?
Liabilities		(56,500	)		(56,500	)
Common stock		(100,000	)
Retained earnings		(35,000	)

1&2. Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $167,000 and $104,500. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the acquisition of Delex assuming the cash exchange of $167,000.

Record the acquisition of Delex assuming the cash exchange of $104,500.

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