Question
Q1. Sellco established a car dealership in a town. This dealership is popular as no other town nearby has a showroom. The owner of this
Q1.
Sellco established a car dealership in a town. This dealership is popular as no other town nearby has a showroom. The owner of this dealership wanted to sell and retire. Purchaseco came forward to buy this dealership for a price of $380,000 On the date of sale the balance sheet of Sellco is as under:
Assets |
|
|
|
| Liabilities |
|
|
|
Cash |
|
| 64,400 |
| Accounts Payable |
| 106,300 |
|
Accounts Receivable |
|
| 34,200 |
| Loans Payable |
| 249,600 |
|
Inventory |
|
| 245,100 |
| Income tax payable |
| 12,100 |
|
Furniture |
|
| 94,600 |
| Salaries payable |
| 6,800 |
|
Buildings |
|
| 244,900 |
| Retained earnings |
| 308,400 |
|
|
|
| 683,200 |
|
|
| 683,200 |
|
The fair market values of the assets and liabilities revealed the following:
Accounts Receivable 28,900 Inventory 214,300 Furniture 72,600 Buildings 366,800 Loans payable 255,300 Income tax payable 10,400 |
Please find out the goodwill / bargain purchase amount and also prepare the journal entry on the day of acquision
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