Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Plant acquisitions for selected companies are presented below. 1. Protex Inc acquired land buildings, and equipment from a bankrupt company for a lump-sum price of

image text in transcribed
image text in transcribed
image text in transcribed
Plant acquisitions for selected companies are presented below. 1. Protex Inc acquired land buildings, and equipment from a bankrupt company for a lump-sum price of $700,000. At the time of purchase, the assets had the following book and appraisal values Book Values $200,000 Land Appraisal Values $300,000 250,000 250,000 Buildings 450.000 Equipment 300.000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 200.000 Buildings 250,000 Equipment 250,000 Cash 700,000 2. Apple Industries purchased store equipment by making a $10,000 cash down payment and signing a 2-year, $40,000.8% note payable. The purchase was recorded as follows. Store Equipment 56,400 Cash 10,000 Note Payable 40,000 Interest Payable 6,400 3. Cherry Company purchased office equipment for $50,000, terms 1/10,6/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was: Office Equipment 50.000 Cash 49,500 Purchase Discounts 500 4. Bubble Inc. recently received at zero cost land from the Village of Wellington as an inducement to locate its business in the Village, The appraised value of the land is $120,000. The company made no entry to record the land because it had no cost basis. 5. Gump Company built a warehouse for $750,000. It could have purchased the building for $900,000. The controller made the following entry Warehouse 900.000 Cash 750,000 Profit on Construction 150,000 Prepare the entry that should have been made at the date of each acquisition. (Round intermediate calculations to 5 decimal palces, eg, 0.56487 and final answers to decimal places, eg,5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) No. Account Titles and Explanation Debit Credit 1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Accounting Finance And Auditing For Lawyers

Authors: Lawrence A. Cunningham

5th Edition

0314912606, 978-0314912602

More Books

Students also viewed these Accounting questions