The following book and fair values were available for NorthStar Company as of March 1. BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction. Required: Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks.
The following book and fair values were available for NorthStar Company as of March 1. BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction. Required: Pass the necessary journal entries in the books of BluePrint for its acquisition of NorthStar’s common stocks.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following book and fair values were available for NorthStar Company as of March 1.
BluePrint Company pays $4,200,000 cash for all of NorthStar’s common stock in a merger, after which NorthStar will cease to exist as a separate entity. BluePrint pays $70,000 for legal fees to complete the transaction.
Required:
Pass the necessary
Transcribed Image Text:Inventory
Land
Buildings
Customer relationships
Accounts payable
Common stock
Additional paid-in capital
Retained earnings, 1/1
Revenues
Expenses
Book value
$ 630,000
750,000
1,700,000
-0-
(80,000)
(2,000,000)
(500,000)
(360,000)
(420,000)
280,000
Fair value
$ 600,000
990,000
2,000,000
800,000
(80,000)
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