On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as I. follows: Minor Company Balance Sheet Assets Liabilities and Owners' Equity Cash $40,000 Notes Payable $55,000 Acc. Receivable 80,000 Capital 280,000 Inventory 120,000 $335,000 Buildings(net) Equipment(net) 50,000 30,000 5,000 10,000 Patents Trademarks $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp.
On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as I. follows: Minor Company Balance Sheet Assets Liabilities and Owners' Equity Cash $40,000 Notes Payable $55,000 Acc. Receivable 80,000 Capital 280,000 Inventory 120,000 $335,000 Buildings(net) Equipment(net) 50,000 30,000 5,000 10,000 Patents Trademarks $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing
a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as
follows:
1.
Minor Company
Balance Sheet
Assets
Liabilities and Owners' Equity
Cash
$40,000
Notes Payable
$55,000
Acc. Receivable
80,000
Capital
280,000
Inventory
120,000
$335,000
Buildings(net)
Eguipment(net)
50,000
30,000
Patents
5,000
Trademarks
10,000
$335,000
An appraisal indicated that the fair market value of the receivables was $75,000, and the
fair market value of inventory and buildings were $110,000 and $70,000 respectively.
According to the apRraisal, the patents were worthless.
Required: Prepare the journal entry to be record the purchase by Grand Corp.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe5b31df6-a55b-4a60-8264-4945be1d9dfb%2Fe026fac9-06ba-4c2d-9a09-853fb63f934b%2F9go5t0h_processed.png&w=3840&q=75)
Transcribed Image Text:On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing
a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as
follows:
1.
Minor Company
Balance Sheet
Assets
Liabilities and Owners' Equity
Cash
$40,000
Notes Payable
$55,000
Acc. Receivable
80,000
Capital
280,000
Inventory
120,000
$335,000
Buildings(net)
Eguipment(net)
50,000
30,000
Patents
5,000
Trademarks
10,000
$335,000
An appraisal indicated that the fair market value of the receivables was $75,000, and the
fair market value of inventory and buildings were $110,000 and $70,000 respectively.
According to the apRraisal, the patents were worthless.
Required: Prepare the journal entry to be record the purchase by Grand Corp.
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