Plant acquisitions for selected companies are as follows. 1. Kingbird Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $728,000. At the time of purchase, Torres's assets had the following book and appraisal values. Appraisal Book Values Values Land $208,000 $156,000 Buildings 260,000 364,000 Equipment 312,000 312,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 156,000 Buildings 260,000 Equipment 312,000 Cash 728,000
Plant acquisitions for selected companies are as follows. 1. Kingbird Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $728,000. At the time of purchase, Torres's assets had the following book and appraisal values. Appraisal Book Values Values Land $208,000 $156,000 Buildings 260,000 364,000 Equipment 312,000 312,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 156,000 Buildings 260,000 Equipment 312,000 Cash 728,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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