Question
Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Sheridan Galleries. The balance sheet of Sheridan is given in an abbreviated form
Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Sheridan Galleries. The balance sheet of Sheridan is given in an abbreviated form below.
SHERIDAN GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2017 Assets Liabilities and Stockholders Equity Cash $117,000 Accounts payable $49,900 Land 71,200 Notes payable (long-term) 302,300 Buildings (net) 201,200 Total liabilities 352,200 Equipment (net) 176,200 Common stock $209,700 Copyrights (net) 31,200 Retained earnings 34,900 244,600 Total assets $596,800 Total liabilities and stockholders equity $596,800
Moss and Sheridan agree that:
1. Land is undervalued by $44,700. 2. Equipment is overvalued by $5,300.
Sheridan agrees to sell the gallery to Moss for $381,400. Prepare the entry to record the purchase of Sheridan Galleries on Mosss books
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