Purchasing Blue Water Company

he We The Blue Water Balance Sheet on October 1, 2018 is as follows: Assets Cash Accounts Receivable Inventories Land Building, net Equipment, net Patent Trademark xler Company is planning on purchasing Blue Water Company. $27,500 61,300 145,000 90,000 325,000 45,300 80,000 Total Assets $778,100 Liabilities Accounts Payable $92,560 Stockholders' Equity 500,000 185,540 Common Stock Retained Earnings Total Liabilities and Stockholder's Equity $778,100 Wexler will pay $900,000 cash down, sign a Note Payable to Blue Water in the amount of $500,000, and assume the Accounts Payable. All assets listed in the balance sheet will be acquired by Wexler, at their listed amounts with exception of the following assets which will be acquired at their agreed fair values as follows: Inventories $167,300 Land $127,000 Building $415,750 Patent $165,000 1. Prepare the journal entries on Wexler's books to record the purchase. 2. Prepare the journal entry on Blue Water's books to record the sale. 3. List the specific components of the gain to Blue Water. Required