Prepare Acquisition Journal Entry to reflect fair values of New Castle Coffee on 1/1

1. Prepare the acquisition accounting analysis of New Castle Coffee using the information in Schedule 2 and Schedule 2A
2. Prepare the acquisition journal entry for New Castle Coffee based on your work above.
3. Using the journal entry in Number 3, compare the journal entry values by account and amount and identify all differences compared to Schedule 2.

Schedule 2 Trial Balance of New Castle Coffee as of 01/01/18 Credit Debit 1,000 4,000 15,000 2,000 Accounts WTC Checking WTC money market account Accounts Receivable Allowance for uncollectible accounts Inventory Prepaids rent -current Land Building Equipment Accumulated Depreciation Debt set up costs, net Accounts payable Accrued payroll and benefits Accrued expenses Note payable 12/31/16 Common stock 1,000 shares, par $1.00 Additional paid in capital Retained eamings{loss) 8,000 5,000 50,000 85,000 48,000 15,000 5,000 12,000 3,000 2,000 100,000 1,000 74,000 12,000 Total 221,000 000 | 221,000 Schedule 2A New Castle Coffee Acquisition Support Appraisal Results The appraisal of the fixed assets resulted in the following fair market values: $ Land Building Equipment 60,000 92,000 45,000 Fixed Assets Fair Market Value Is 11,000 Due Diligence Review As part of the due diligence process, it was determined that New Castle Coffee was not accruing for income taxes. The following balances were indicated. Income tax payable {current liability) Deferred tax liability {long-term liability) $ $ 2,500 3.800