On June 30, 2021, Streeter Company reported the following account balances: $ (16,100) (74, 250) (90,000) (100,000) $ (280,350) Receivables 2$ Inventory Buildings (net) Equipment (net) 88,200 Current liabilities 75,250 Long-term liabilities 87,500 Common stock 29,400 Retained earnings $ 280,350 Total liabilities and equities Total assets On June 30, 2021, Princeton Company paid $315,200 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $19,900 in legal fees. Princeton also agreed to pay $66,400 to the former owners of Streeter contingent on meeting certain revenue goals during 2022. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $23,700. In determining its offer, Princeton noted the following pertaining to Streeter: • It holds a building with a fair value $44,900 more than its book value. • It has developed a customer list appraised at $29,000, although it is not recorded in its financial records. • It has research and development activity in process with an appraised fair value of $39,100. However, the project has not yet reached technological feasibility and the assets used in the activity have no alternative future use. • Book values for the receivables, inventory, equipment, and liabilities approximate fair values. Prepare Princeton's accounting entries to record the combination with Streeter. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
On June 30, 2021, Streeter Company reported the following account balances: $ (16,100) (74, 250) (90,000) (100,000) $ (280,350) Receivables 2$ Inventory Buildings (net) Equipment (net) 88,200 Current liabilities 75,250 Long-term liabilities 87,500 Common stock 29,400 Retained earnings $ 280,350 Total liabilities and equities Total assets On June 30, 2021, Princeton Company paid $315,200 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $19,900 in legal fees. Princeton also agreed to pay $66,400 to the former owners of Streeter contingent on meeting certain revenue goals during 2022. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $23,700. In determining its offer, Princeton noted the following pertaining to Streeter: • It holds a building with a fair value $44,900 more than its book value. • It has developed a customer list appraised at $29,000, although it is not recorded in its financial records. • It has research and development activity in process with an appraised fair value of $39,100. However, the project has not yet reached technological feasibility and the assets used in the activity have no alternative future use. • Book values for the receivables, inventory, equipment, and liabilities approximate fair values. Prepare Princeton's accounting entries to record the combination with Streeter. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On June 30, 2021, Streeter Company reported the following account balances:
$ (16,100)
(74, 250)
(90,000)
(100,000)
$ (280,350)
Receivables
2$
Inventory
Buildings (net)
Equipment (net)
88,200 Current liabilities
75,250 Long-term liabilities
87,500 Common stock
29,400 Retained earnings
$ 280,350 Total liabilities and equities
Total assets
On June 30, 2021, Princeton Company paid $315,200 cash for all assets and liabilities of Streeter, which will cease to exist as a
separate entity. In connection with the acquisition, Princeton paid $19,900 in legal fees. Princeton also agreed to pay $66,400 to the
former owners of Streeter contingent on meeting certain revenue goals during 2022. Princeton estimated the present value of its
probability adjusted expected payment for the contingency at $23,700.
In determining its offer, Princeton noted the following pertaining to Streeter:
• It holds a building with a fair value $44,900 more than its book value.
• It has developed a customer list appraised at $29,000, although it is not recorded in its financial records.
• It has research and development activity in process with an appraised fair value of $39,100O. However, the project has not yet
reached technological feasibility and the assets used in the activity have no alternative future use.
• Book values for the receivables, inventory, equipment, and liabilities approximate fair values.
Prepare Princeton's accounting entries to record the combination with Streeter. (If no entry is required for a transaction/event, select
"No journal entry required" in the first account field.)
Transcribed Image Text:Journal entry worksheet
1
2
>
Record the acquisition of Streeter Company.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1
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