Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

29. On June 30, 2015, Streeter Company reported the following account balances: Receivables $ 83,900 Current liabilities $ (12,900) Inventory 70,250 Long-term liabilities (54,250) Buildings

29. On June 30, 2015, Streeter Company reported the following account balances:

Receivables $ 83,900 Current liabilities $ (12,900)

Inventory 70,250 Long-term liabilities (54,250)

Buildings (net) 78,900 Common stock (90,000)

Equipment (net) 24,100 Retained earnings (100,000)

Total assets $ 257,150 Total liabilities and equities $(257,150)

On June 30, 2015, Princeton Company paid $310,800 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $15,100 in legal fees. Princeton also agreed to pay $55,600 to the former own- ers of Streeter contingent on meeting certain revenue goals during 2016. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $17,900. In determining its offer, Princeton noted the following pertaining to Streeter: It holds a building with a fair value $43,100 more than its book value. It has developed a customer list appraised at $25,200, although it is not recorded in its finan- cial records. It has research and development activity in process with an appraised fair value of $36,400. However, the project has not yet reached technological feasibility and the assets used in the activity have no alternative future use. Book values for the receivables, inventory, equipment, and liabilities approximate fair values. Prepare Princetons accounting entry to record the combination with Streeter.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Quality System For The Defense Industry

Authors: Charles B. Robinson

1st Edition

0873890787, 978-0873890786

More Books

Students also viewed these Accounting questions

Question

=+26.14. 1 Show that y has no point masses if 2(t) is integrable.

Answered: 1 week ago