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The following book and fair values were available for Westmont Company as of March 1. Book Value Fair Value $ 588,500 $ 549,000 780,000 1,045,500 1,755,000 2,056,500 T 0 840,000 (2,000,000) (500,000) (378,000) (448,000) 304,000 Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses (101,500) (101,500) Arturo Company pays $4,180,000 cash and issues 22,700 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont's common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $32,200 and Arturo pays $45,400 for legal fees to complete the transaction. Prepare Arturo's journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The following book and fair values were available for Westmont Company as of March 1. Book Value Fair Value $ 588,500 $ 549,000 780,000 1,045,500 1,755,000 2,056,500 T 0 840,000 (2,000,000) (500,000) (378,000) (448,000) 304,000 Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses (101,500) (101,500) Arturo Company pays $4,180,000 cash and issues 22,700 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont's common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $32,200 and Arturo pays $45,400 for legal fees to complete the transaction. Prepare Arturo's journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

FINANCIAL ACCOUNTING
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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  • 1
    Record the acquisition of Westmont Company.
     
  • 2
    Record the legal fees related to the combination.
     
  • 3
    Record the payment of stock issuance costs.
4 Skipped References The following book and fair values were available for Westmont Company as of March 1. Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Book Value Fair Value $ 588,500 View transaction list $ 549,000 780,000 1,045,500 1,755,000 2,056,500 840,000 (101,500) 1 Arturo Company pays $4,180,000 cash and issues 22,700 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont's common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $32,200 and Arturo pays $45,400 for legal fees to complete the transaction. (101,500) (2,000,000) (500,000) (378,000) (448,000) 304,000 Prepare Arturo's journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 0 Record the acquisition of Westmont Company. 2 Record the legal fees related to the combination. 3 Record the payment of stock issuance costs. :X: >
Transcribed Image Text:4 Skipped References The following book and fair values were available for Westmont Company as of March 1. Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Book Value Fair Value $ 588,500 View transaction list $ 549,000 780,000 1,045,500 1,755,000 2,056,500 840,000 (101,500) 1 Arturo Company pays $4,180,000 cash and issues 22,700 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont's common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $32,200 and Arturo pays $45,400 for legal fees to complete the transaction. (101,500) (2,000,000) (500,000) (378,000) (448,000) 304,000 Prepare Arturo's journal entries to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 0 Record the acquisition of Westmont Company. 2 Record the legal fees related to the combination. 3 Record the payment of stock issuance costs. :X: >
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