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Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Sandhill Galleries. The balance sheet of Sandhill is given in an abbreviated form
Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Sandhill Galleries. The balance sheet of Sandhill is given in an abbreviated form below.
SANDHILL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2017 | ||||||||
Assets | Liabilities and Stockholders Equity | |||||||
Cash | $109,000 | Accounts payable | $50,700 | |||||
Land | 70,400 | Notes payable (long-term) | 301,700 | |||||
Buildings (net) | 200,400 | Total liabilities | 352,400 | |||||
Equipment (net) | 175,400 | Common stock | $230,600 | |||||
Copyrights (net) | 30,400 | Retained earnings | 2,600 | 233,200 | ||||
Total assets | $585,600 | Total liabilities and stockholders equity | $585,600 |
Moss and Sandhill agree that:
1. | Land is undervalued by $37,800. | |
2. | Equipment is overvalued by $4,900. |
Sandhill agrees to sell the gallery to Moss for $381,500. Prepare the entry to record the purchase of Sandhill Galleries on Mosss books.
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