Buyer Company purchased Target Company for $800,000 cash. Target Company had total liabilities of $300,000. Buyer Company’s assessment of the fair values it obtained when it purchased Target Company is as follows: Cash . . . . . . . . . . . . . . . . . . . $100,000 Inventory . . . . . . . . . . . . . . . 50,000 In-process R&D . . . . . . . . . . 500,000 Assembled workforce . . . . . 120,000 Make the journal entry necessary to record this business acquisition. Please explain the journal entry through narration & also show calculations wherever required.
Buyer Company purchased Target Company for $800,000 cash. Target Company had total liabilities of $300,000. Buyer Company’s assessment of the fair values it obtained when it purchased Target Company is as follows: Cash . . . . . . . . . . . . . . . . . . . $100,000 Inventory . . . . . . . . . . . . . . . 50,000 In-process R&D . . . . . . . . . . 500,000 Assembled workforce . . . . . 120,000 Make the journal entry necessary to record this business acquisition. Please explain the journal entry through narration & also show calculations wherever required.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Buyer Company purchased Target Company for $800,000 cash. Target Company had total liabilities of $300,000. Buyer Company’s assessment of the fair values it obtained when it purchased Target Company is as follows:
Cash . . . . . . . . . . . . . . . . . . . $100,000
Inventory . . . . . . . . . . . . . . . 50,000
In-process R&D . . . . . . . . . . 500,000
Assembled workforce . . . . . 120,000
Make the
Please explain the journal entry through narration & also show calculations wherever required.
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