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ZWEIFEL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2017 Liabilities and Stockholders' Equity Accounts payable Notes payable (long-term) Assets $ 50,000 300,000 Cash $100,000 70,000 Land Buildings (net) Equipment (net) Copyrights (net) Total liabilities 200,000 175,000 30,000 350,000 Common stock $200,000 25,000 Retained earnings 225,000 Total assets $575,000 Total liabilities and stockholders' equity $575,000

ZWEIFEL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2017 Liabilities and Stockholders' Equity Accounts payable Notes payable (long-term) Assets $ 50,000 300,000 Cash $100,000 70,000 Land Buildings (net) Equipment (net) Copyrights (net) Total liabilities 200,000 175,000 30,000 350,000 Common stock $200,000 25,000 Retained earnings 225,000 Total assets $575,000 Total liabilities and stockholders' equity $575,000

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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Question

(Accounting for Goodwill) Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel Galleries. The following balance sheet of Zweifel is given in an abbreviated form as follows.

Check below image for balance sheet.

Moss and Zweifel agree that:
1. Land is undervalued by $30,000.
2. Equipment is overvalued by $5,000.
Zweifel agrees to sell the gallery to Moss for $350,000.


Instructions
Prepare the entry to record the purchase of Zweifel Galleries on Moss’s books.

ZWEIFEL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2017 Liabilities and Stockholders' Equity Accounts payable Notes payable (long-term) Assets $ 50,000 300,000 Cash $100,000 70,000 Land Buildings (net) Equipment (net) Copyrights (net) Total liabilities 200,000 175,000 30,000 350,000 Common stock $200,000 25,000 Retained earnings 225,000 Total assets $575,000 Total liabilities and stockholders' equity $575,000
Transcribed Image Text:ZWEIFEL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2017 Liabilities and Stockholders' Equity Accounts payable Notes payable (long-term) Assets $ 50,000 300,000 Cash $100,000 70,000 Land Buildings (net) Equipment (net) Copyrights (net) Total liabilities 200,000 175,000 30,000 350,000 Common stock $200,000 25,000 Retained earnings 225,000 Total assets $575,000 Total liabilities and stockholders' equity $575,000
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