Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $11,840,000 in cash. The book value of Smith's net assets (assets minus liabilities) was $8,500,000. The fair values of all of Smith's assets and liabilities were equal to their book values with the following exceptions: Book Value Fair Value Receivables $2,000,000 $ 1,730,000 Property, plant, and equipment 8,700,000 10,170,000 Intangible assets 270,000 1.340,000 Required: Calculate the amount paid for goodwill. Goodwill $ 60.000 Pinewood Company purchased two buildings on four acres of land. The lump sum purchase price was $1,400,000 According to Independent approisals, the fair values were $675,000 (building A) and $300.000 (building B) for the buildings and $525,000 for the land Required: Determine the initial valuation of the buildingo and the land: Asset Building Building Land Total Eest Valuation $ 400,000 630.000 280,000 1,400.000 Oaktree Company purchased new equipment and made the following expenditures Purchase price Sales tax Freight charges for spent of equipment Insurance on the equipment for the first year Installation of equipment 660,000 3,700 850 1.050 2.500 The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash Required: Prepare the necessary journal entries to record the above expenditures (if no entry is required for a transaction/event, select "No Journal entry required in the first account field.) NO Credit General Journal Transaction 1 Debit 63.700 1 Equipment Accounts payable Cash TOO 62.500 2.180 1.050 2 2 Prepaid insurance Cash 00 1,050 The Tinsley Company exchanged land that it had been holding for future plant expansion for a more suitable parcel focated farther from residential areas. Tinsley carried the land at its original cost of $75,000. According to an independent appraisal, the land currently is worth $180,000. Tinsley paid $32,000 in cash to complete the transaction Required: 1. What is the fair value of the new parcel of land received by Tinsley assuming the exchange has commercial substance? 2. Prepare the joumal entry to record the exchange assuming the exchange has commercial substance 3. Prepare the journal entry to record the exchange assuming the exchange lacks commercial substance 4. Prepare the journal entry to record the exchange except that Tinsley received $36,000 in the exchange and the exchange facies commercial substance. Complete this question by entering your answers in the tabs below. Reg. Reg 2 and 3 Red Prepare the journal entry to record the exchange except that Tinsley received $36,000 in the exchange, and the exchange lacks commercial substance. (If no entry is required for a transaction/event, select "No only required in the first account field. Do not found intermediate calculations 10 Transaction General Journal Credit Land-new 14400 Cash 36005 Land-old 75,000 Ganon exchange of assets 105,000 OOOO
