PROBLEM 3: PRESENTED BELOW ARE THE BALANCE SHEETS OF HARRY AND POTTER COMPANIES ON JANUARY 1, 2014

HARRY POTTER

CASH 5,000,000 800,000

ACCTS RECEIVABLE 8,000,000 200,000

LAND 9,000,000 300,000

EQUIPMENT 9,000,000 900,000

A/D EQUIPMENT (2,000,000) (100,000)

TOTAL ASSETS 29,000,000 2,100,000

ACCTS PAYABLE 5,000,000 400,000

COMMON STOCK 20,000,000 1,000,000

RETAINED EARNINGS 4,000,000 700,000

TOTAL EQUITY 24,000,000 1,700,000

TOTAL LIA +EQUITY 29,000,000 2,100,000

On January 2^nd Harry bought all of the outstanding stock of Potter from Potter