Allerton Company acquires all of Deluxe Companys assets and liabilities for cash on January 1, 2021, and
Question:
Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2021, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:
Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts:
a. $145,000.
b. $110,000
Book Values Fair Values Current assets $ 60,000 $ 60,000 Building Land. Trademark 90,000 50,000 10,000 20,000 -0- 30,000 Goodwill 15,000 ? Liabilities (40,000) (100,000) (35,000) (40,000) Common stock Retained earnings
Step by Step Answer:
Case 1 Fair value of consideration transferred 145000 Fair value of net identifiable assets 120000 E...View the full answer
Advanced Accounting
ISBN: 9781260247824
14th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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The accounting equation is a formula that shows the sum of a company\\\'s liabilities and shareholders\\\' equity are equal to its total assets (Assets = Liabilities + Equity). The clear-cut relationship between a company\\\'s liabilities, assets, and equity is the backbone of double-entry bookkeeping.
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