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Purple Corp. purchased all of the listed assets and liabilities of Sudden Corp. for $1,750,000. The following assets and liabilities were purchased: Book Value Fair
Purple Corp. purchased all of the listed assets and liabilities of Sudden Corp. for $1,750,000. The following assets and liabilities were purchased:
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| Book Value | Fair Market Value | ||||
| Accounts receivables | $ | 185,000 |
| $ | 185,000 |
|
| Inventory |
| 177,000 |
|
| 267,500 |
|
| Property, plant, and equipment (net) |
| 865,000 |
|
| 1,166,000 |
|
| Patent |
| 0 |
|
| 288,000 |
|
| Liabilities |
| (190,000 | ) |
| (190,000 | ) |
Required: Prepare the journal entry for the acquisition.
| General Journal | |||
| Date | Account Titles and Explanation | Debit | Credit |
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