The following book and fair values were available for Westmont Company as of March 1. Book Value Fair Value Inventory $ 692,500 $ 643,750 Land 757,500 1,047,750 Buildings 1,755,000 2,073,750 Customer relationships 0 804,750 Accounts payable (102,000 ) (102,000 ) Common stock (2,000,000 ) Additional paid-in capital (500,000 ) Retained earnings, 1/1 (434,500 ) Revenues (488,500 ) Expenses 320,000 Arturo Company pays $3,580,000 cash and issues 29,800 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 $28,200 and Arturo pays $49,100 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 Inventory $ 692,500 $ 643,750 Land 757,500 1,047,750 Buildings 1,755,000 2,073,750 Customer relationships 0 804,750 Accounts payable (102,000 ) (102,000 ) Common stock (2,000,000 ) Additional paid-in capital (500,000 ) Retained earnings, 1/1 (434,500 ) Revenues (488,500 ) Expenses 320,000 Arturo Company pays $3,580,000 cash and issues 29,800 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 $28,200 and Arturo pays $49,100 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.)
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 Westmont Company as of March 1.
| Book Value | Fair Value | |||||
| Inventory | $ | 692,500 | $ | 643,750 | ||
| Land | 757,500 | 1,047,750 | ||||
| Buildings | 1,755,000 | 2,073,750 | ||||
| Customer relationships | 0 | 804,750 | ||||
| Accounts payable | (102,000 | ) | (102,000 | ) | ||
| Common stock | (2,000,000 | ) | ||||
| Additional paid-in capital | (500,000 | ) | ||||
|
|
(434,500 | ) | ||||
| Revenues | (488,500 | ) | ||||
| Expenses | 320,000 | |||||
Arturo Company pays $3,580,000 cash and issues 29,800 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 $28,200 and Arturo pays $49,100 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
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