E12.12 (LO 3) (Accounting for Goodwill) Fred Graf, owner ofGraf Interiors, is negotiating for the purchase of Terrell Galleries. Thefollowing statement of financial position of Terrell is given in anabbreviated form.Terrell GalleriesStatement of Financial PositionAs of December 31, 2022AssetsEquity and LiabilitiesBuildings(net)$200,000 Share capital-ordinary$200,000Equipmer(net)175,000 Retained earnings25,000 $225,000Copyrights|(net)30,000 Ассounts payable50,00070,000 Long-term notespayableLand300,000Cash100,000Total liabilities350,000$575,000 Total equity andliabilitiesTotal assets$575,000Graf and Terrell agree that:1. Land is undervalued by $50,000.2. Equipment is overvalued by $5,000.Terrell agrees to sell the gallery to Graf for $380,000.InstructionsPrepare the entry to record the purchase of Terrell Galleries on Graf'sbooks.

A reverse acquisition is said to have occured when the entity that issues securities (the legal…

E12.12 (LO 3) (Accounting for Goodwill) Fred Graf, owner of Graf Interiors, is negotiating for the purchase of Terrell Galleries. The following statement of financial position of Terrell is given in an abbreviated form. Terrell Galleries Statement of Financial Position As of December 31, 2022 Assets Equity and Liabilities Buildings (net) $200,000 Share capital- ordinary $200,000 Equipment (net) 175,000 Retained earnings 25,000 $225,000 Сорyrights |(net) 30,000 Ассounts payable 50,000 70,000 Long-term notes payable Land 300,000 Cash 100,000 Total liabilities 350,000 $575,000 Total equity and liabilities Total assets $575,000 Graf and Terrell agree that:

E12.12 (LO 3) (Accounting for Goodwill) Fred Graf, owner of Graf Interiors, is negotiating for the purchase of Terrell Galleries. The following statement of financial position of Terrell is given in an abbreviated form. Terrell Galleries Statement of Financial Position As of December 31, 2022 Assets Equity and Liabilities Buildings (net) $200,000 Share capital- ordinary $200,000 Equipment (net) 175,000 Retained earnings 25,000 $225,000 Сорyrights |(net) 30,000 Ассounts payable 50,000 70,000 Long-term notes payable Land 300,000 Cash 100,000 Total liabilities 350,000 $575,000 Total equity and liabilities Total assets $575,000 Graf and Terrell agree that:

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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ACME Co. paid $110,000 for the net assets of Comb Corp. At the time of the acquisition the following information was available related to Comb's balance sheet: Book Value Fair Value Current Assets $50,000 $ 50,000 Building 80,000 100,000 Equipment 40,000 50,000 Liabilities 30,000 30,000 What is the amount recorded by ACME for the Building? a. $110,000 b. $20,000 c. $80,000 d. $100,000
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Required Information [The following information applies to the questions displayed below] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $467,500, land, $243,100; land improvements, $56,100; and four vehicles, $168,300. Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $29,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Required 1A Required 18 Required 2 Allocation of total cost Building…
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