Polychromasia, Inc. had a number of receivables from subsidiaries at the balance sheet date, as well as several payables to subsidiaries. Of its five subsidiaries, four are consolidated in the financial statements (Green Company, Black Inc., White & Sons, and Silver Co.). Only the Brown Company is not consolidated with Polychromasia and the other affiliates. The following list of receivables and payables shows balances at 12/31/13.

Interest receivable from the Brown Company $ 50,000

Interest payable to Black Inc. 75,000

Intercompany payable to Silver Co. 105,000

Long-term advance to Green Company 150,000

Long-term payable to Silver Co. 450,000

Long-term receivable from Brown Company 500,000

Required:

A. Show the classification and amount(s) that should be reported in the consolidated balance sheet of Polychromasia, Inc. and Subsidiaries at 12/31/13 as receivable from subsidiaries.

B. Show the classification and amount(s) that should be reported in the consolidated balance sheet of Polychromasia, Inc. and Subsidiaries at 12/31/13 as payable to subsidiaries.

Peep Inc. incurred the following direct costs:Peep Inc. acquired 100% of the outstanding common stock of Shy Inc. for $2,500,000 cash and 15,000 shares of its common stock ($2 par value). The stocks market value was $40 on the acquisition date.

Accounting fees for the purchase $15,000

Legal fees for registering the common stock 30,000

Other legal fees for the acquisition 45,000

Travel expenses to meet with Shy managers 5,000

SEC filing fees 2,000

$97,000

Before the acquisition consummation date, $90,000 of the direct costs was charged to a deferred charges account pending the completion of the acquisition. The remaining $7,000 has not been accrued or paid.

Required:

Prepare the journal entry to record both the acquisition and the direct costs.