On January 1, 2020, AMI Corporation purchased the non-cash net assets of Sheffield Ltd. for $8,087,900. Following is the statement of financial position of Sheffield Ltd. from the company's year-end the previous day: Sheffield Ltd. Statement of Financial Position As at December 31, 2019 Cash $630,000 Accounts receivable 554,000 Inventory 2,510,000 Property, plant, and equipment (net) 2,070,000 Land 2,570,000 $8,334,000 Accounts payable $324,000 Common shares 2,520,000 Retained earnings 5,490,000 $8,334,000 As part of the negotiations, AMI and Sheffield agreed on the following fair values for the items on Sheffield's statement of financial position: Accounts receivable $552,400 Inventory 2,265,000 Property, plant, and equipment 1,870,000 Land 3,620,000 Accounts payable 313,500 Prepare the journal entry on the books of AMI Corporation to record the purchase, assuming that instead of buying the net assets of Sheffield, AMI purchased all of the company's shares, instead. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

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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On January 1, 2020, AMI Corporation purchased the non-cash net assets of Sheffield Ltd. for $8,087,900. Following is the statement of financial position of Sheffield Ltd. from the company's year-end the previous day:

Sheffield Ltd. Statement of Financial Position As at December 31, 2019
Cash		$630,000
Accounts receivable		554,000
Inventory		2,510,000
Property, plant, and equipment (net)		2,070,000
Land		2,570,000
		$8,334,000
Accounts payable		$324,000
Common shares		2,520,000
Retained earnings		5,490,000
		$8,334,000

As part of the negotiations, AMI and Sheffield agreed on the following fair values for the items on Sheffield's statement of financial position:

Accounts receivable		$552,400
Inventory		2,265,000
Property, plant, and equipment		1,870,000
Land		3,620,000
Accounts payable		313,500

Prepare the journal entry on the books of AMI Corporation to record the purchase, assuming that instead of buying the net assets of Sheffield, AMI purchased all of the company's shares, instead. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

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