Pronghorn Corporation purchased the net assets of Ivanhoe Corporation on January 2, 2020 for $644,000 and also paid $ 23,000 in direct acquisition costs. Ivanhoe's balance sheet on January 1, 2020 was as follows: Accounts receivable-net $207,000 Current liabilities 414,000 Long term debt 46,000 Common stock ($1 par) 69,000 Paid-in capital 92.000 Retained earnings $828,000 Total liab. & equity Inventory Land Building-net Equipment-net Total assets $80,500 184,000 23,000 494,500 46,000 $828,000 Fair values agree with book values except for inventory, land, and equipment, which have fair values of $454,000, $ 56,000 and $ 82.000, respectively. Ivanhoe has patent rights valued at $23,000.
Pronghorn Corporation purchased the net assets of Ivanhoe Corporation on January 2, 2020 for $644,000 and also paid $ 23,000 in direct acquisition costs. Ivanhoe's balance sheet on January 1, 2020 was as follows: Accounts receivable-net $207,000 Current liabilities 414,000 Long term debt 46,000 Common stock ($1 par) 69,000 Paid-in capital 92.000 Retained earnings $828,000 Total liab. & equity Inventory Land Building-net Equipment-net Total assets $80,500 184,000 23,000 494,500 46,000 $828,000 Fair values agree with book values except for inventory, land, and equipment, which have fair values of $454,000, $ 56,000 and $ 82.000, respectively. Ivanhoe has patent rights valued at $23,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A)
Prepare Pronghorn's general journal entry for the cash purchase of Ivanhoe 's net assets. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. (ist all debit entries before credit entries.)
B)
Assume Pronghom Corporation purchased the net assets of Ivanhoe Corporation for$644,000rather than$584,000, prepare the generaljournal entry. (Credit occount titles are automaticolly indented when the amount is entered. Do not indent manuolly. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.
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Pronghorn Corporation purchased the net assets of Ivanhoe Corporation on January 2, 2020 for $644,000 and also paid $23,000 in
direct acquisition costs. Ivanhoe's balance sheet on January 1, 2020 was as follows:
$207,000 Current liabilities
Accounts receivable-net
Inventory
Land
Building net
Equipment-net
Total assets
414,000 Long term debt
46,000 Common stock ($1 par)
69,000
Paid-in capital
92.000 Retained earnings
$828,000 Total liab. & equity
$ 80,500
184,000
23,000
494,500
46,000
$828,000
Fair values agree with book values except for inventory, land, and equipment, which have fair values of $454,000, $ 56,000 and $
82.000,respectively. Ivanhoe has patent rights valued at $ 23,000.
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