Peter Corporation purchased the net assets of Salim, Inc. on January 2, 2020 for $380,000 cash and also paid legal fees associated with acquisition of Salim of $15,000. Issuance expenses were $10,000. Salim, Inc. was dissolved on the date of the acquisition. Salim's balance sheet on January 2, 2020 was as follows: Accounts receivable-net $90,000 220,000 30,000 20,000 40,000 $400,000 Current liabilities Long term debt Common stock ($1 par) Addtl. paid-in capital Retained earnings Total liab. & equity $75,000 90,000 10,000 205,000 20,000 $400,000 Inventory Land Building-net Equipment-net Total assets Fair values agree with book values except for inventory, land, and equipment, which have fair values of $260,000, $35,000 and $35,000, respectively. Salim has patent rights with a fair value of $20,000. Required: Prepare Peter's general journal entry for the cash purchase of Salim's net assets.

Peter Corporation purchased the net assets of Salim, Inc. on January 2, 2020 for $380,000 cash and also paid legal fees associated with acquisition of Salim of $15,000. Issuance expenses were $10,000. Salim, Inc. was dissolved on the date of the acquisition. Salim's balance sheet on January 2, 2020 was as follows: Accounts receivable-net $90,000 220,000 30,000 20,000 40,000 $400,000 Current liabilities Long term debt Common stock ($1 par) Addtl. paid-in capital Retained earnings Total liab. & equity $75,000 90,000 10,000 205,000 20,000 $400,000 Inventory Land Building-net Equipment-net Total assets Fair values agree with book values except for inventory, land, and equipment, which have fair values of $260,000, $35,000 and $35,000, respectively. Salim has patent rights with a fair value of $20,000. Required: Prepare Peter's general journal entry for the cash purchase of Salim's net assets.

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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