On July 1, 2018, Brigham Corporation purchased Young Company by paying Tk. 1,50,000 cash and issuing a Tk.1,00,000 note payable to Mr. Young. At July 1, 2018, the balance sheet of the company was as follows: Cash Tk.50,000 Accounts payable Tk.2,00,000 Accounts Receivable Tk.90,000 Stockholders’ equity Tk.2,35,000 Inventory Tk.1,00,000 Tk.4,35,000 Land Tk.40,000 Building Tk.75,000 Equipment Tk.70,000 Trademark Tk.10,000 Tk.4,35,000 The recorded amounts all approximate current values except for land (fair value Tk.60,000), Inventory (fair value Tk.1,25,000) and trademark (fair value Tk.15,000), Requirements: i) Prepare the July 1 entry for Brigham Corporation to record the purchase. ii) Prepare the December 31, entry for Brigham Corporation to record amortization of intangible assets. The trademark has an estimated useful life of 5 years with a residual value of Tk. 5000.
On July 1, 2018, Brigham Corporation purchased Young Company by paying Tk.
1,50,000 cash and issuing a Tk.1,00,000 note payable to Mr. Young. At July 1, 2018,
the
Cash Tk.50,000 Accounts payable Tk.2,00,000
Accounts Receivable Tk.90,000
Inventory Tk.1,00,000 Tk.4,35,000
Land Tk.40,000
Building Tk.75,000
Equipment Tk.70,000
Trademark Tk.10,000
Tk.4,35,000
The recorded amounts all approximate current values except for land (fair value Tk.60,000),
Inventory (fair value Tk.1,25,000) and trademark (fair value Tk.15,000),
Requirements:
i) Prepare the July 1 entry for Brigham Corporation to record the purchase.
ii) Prepare the December 31, entry for Brigham Corporation to record amortization of
intangible assets. The trademark has an estimated useful life of 5 years with a residual
value of Tk. 5000.
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