Whispering Winds Company acquired the assets (except for cash) and assumed the liabilities of Carla Vista Company on January 1, 2024, paying $740,000 cash. Carla Vista Company's December 31, 2023, balance sheet, reflecting both book values and fair values, showed:
Whispering Winds Company acquired the assets (except for cash) and assumed the liabilities of Carla Vista Company on January 1, 2024, paying $740,000 cash. Carla Vista Company's December 31, 2023, balance sheet, reflecting both book values and fair values, showed:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Don't give answer in image format
Transcribed Image Text:Whispering Winds Company acquired the assets (except for cash) and assumed the liabilities of Carla Vista Company on January 1,
2024, paying $740,000 cash. Carla Vista Company's December 31, 2023, balance sheet, reflecting both book values and fair values,
showed:
D
Accounts receivable (net)
Inventory
Land
Buildings (net)
Equipment (net)
Total
Accounts payable
Note payable
Common stock, $2 par value
Other contributed capital
Retained earnings
Total
Book Value
Fair Value
$85,200
$92,000
106,000
120,900
389,000
465,500
257,000
312,800
$964.900 $1,156,400
120,100
172,800
$103,000 $103,000
200,000
200,000
173,000
249,000
239,900
$964,900
Transcribed Image Text:As part of the negotiations, Whispering Winds Company agreed to pay the former stockholders of Carla Vista Company $193,500 cash
if the post-combination earnings of the combined company (Whispering Winds) reached certain levels during 2024 and 2025. The fair
value of contingent consideration was estimated to be $143,700 on the date of acquisition.
(a)
Record the journal entry on the books of Pham Company to record the acquisition on January 1, 2024. (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 List all debit entries before credit entries)
Account Titles and Explanation
Date
Jan. 1.
2024
Debit
Credit
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education