Record the entry for the purchase of the net assets of Eagle by Mans at the following cash prices:
Mans Company is about to purchase the net assets of Eagle Incorporated, which has the following
|
Assets |
|
|
|
|
|
$ 60,000 |
|
Inventory |
|
100,000 |
|
Equipment |
$ 90,000 |
|
|
|
(50,000) |
40,000 |
|
|
|
|
|
Land and buildings |
$300,000 |
|
|
Accumulated depreciation |
(100,000) |
200,000 |
|
|
|
60,000 |
|
Total assets |
|
$460,000 |
|
|
|
|
|
Liabilities and |
|
|
|
Bonds payable |
|
$ 80,000 |
|
Common stock, $10 par |
|
200,000 |
|
Paid-in capital in excess of par |
|
100,000 |
|
|
|
80,000 |
|
Total liabilities and equity |
|
$460,000 |
Mans has secured the following fair values of Eagle's accounts:
|
Inventory |
$130,000 |
|
Equipment |
60,000 |
|
Land and buildings |
260,000 |
|
Bonds payable |
60,000 |
Acquisition costs were $20,000.
Required:
Record the entry for the purchase of the net assets of Eagle by Mans at the following cash prices:
|
a. |
$480,000 \ |
Journal entry for the purchase of net assets of Eagles by Mans ltd:
| Particulars | Debit | Credit |
| Inventory Account | 130,000 dollars | |
| Account/Bill receivable Account | 60,000 dollars | |
| Bond payable discount | 20000 dollars | |
| Equipment | 60000 dollars | |
| Land and building | 260,000 dollars | |
| Amount of goodwill | 50,000 dollars | |
| To Cash Account | 500000 dollars | |
| To Bond payable Account |
80,000 dollars |
Step by step
Solved in 2 steps
