Allerton Company acquires all Deluxe Companys assets and liabilities for cash on January 1, 2009, and subsequently
Question:
Allerton Company acquires all Deluxe Company’s assets and liabilities for cash on January 1, 2009, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:
Book Values Fair Values Current assets ..... .
. $ 60,000
$60,000 Building .....
90,000 50,000 Land.
. 10,000 20,000 Trademark....
. -0-
30,000 Goodwill.
. 15,000
?
Liabilities..
. (40,000)
(40,000)
Common stock.. . .
(100,000)
Retained earninqs..
(35,000)
Using the acquisition method, prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts:
(1) $145,000.
(2) $110,000.
Step by Step Answer:
Advanced Accounting
ISBN: 9780073379456
9th Edition
Authors: Joe Ben Hoyle, Timothy S. Doupnik, Thomas F. Schaefer, Oe Ben Hoyle