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DO NOT COPY AND PASTE FROM PREVIOUS ANSWERED QUESTIONS ITS WRONG ! Weakfish Company purchased 100% of Squeteague Company on January 1, 2020 for $950,000
- DO NOT COPY AND PASTE FROM PREVIOUS ANSWERED QUESTIONS ITS WRONG ! Weakfish Company purchased 100% of Squeteague Company on January 1, 2020 for $950,000 by issuing 200,000 shares of its $2 par common stock. The book value of Squeteague at the time was $800,000 with the excess attributed to goodwill and equipment equally. There were direct expenses $10,000 and indirect expenses of $40,000. The purchase is an acquisition or consolidation.
- Record the acquisition on January 1, 2020 on the books of Weakfish.
- Assume that the balance sheets immediately after the acquisition are below. Show the elimination/consolidation entries to put them together on the worksheet. Do not extend the balances.
Weakfish Squeteague Dr. Cr.
Cash $ 100,000 $ 50,000
Receivables 50,000 20,000
Investment in S. 950,000
Property & Equipment 600,000 830,000
Goodwill ________ ________ $1,700,000 $900,000
Liabilities
Payables $ 250,000 $ 100,000
Capital Stock 500,000 400,000 Additional Paid in Cap 800,000
Retained Earnings 150,000 400,000 $1,700,000 $ 900,000
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