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

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

FINANCIAL ACCOUNTING
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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The following book and fair values were available for Westmont Company as of March 1.
Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,000 and Arturo pays $42,000 for legal fees to complete the transaction. Prepare Arturo’s journal entries to record its acquisition of Westmont.

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