Question
Allerton Company acquires all of Deluxe Companys assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date,
Allerton Company acquires all of Deluxe Companys assets and liabilities for cash on January 1, 2018, 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 | $ | 51,500 | $ | 51,500 | |||
Building | 92,750 | 44,250 | |||||
Land | 27,000 | 43,000 | |||||
Trademark | 0 | 39,000 | |||||
Goodwill | 21,000 | ? | |||||
Liabilities | (57,250 | ) | (57,250 | ) | |||
Common stock | (100,000 | ) | |||||
Retained earnings | (35,000 | ) | |||||
1&2. Prepare Allertons entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $157,000 and $92,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
(1-record the acquisition of delex assuming the cash exchange of 157,000). (2-record the acquisition of delex assuming the cash exchange of 92,000)
general journal....debit...credit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started