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The following book and fair values were available for Westmont Company as of March 1. Book Value Fair Value Inventory $ 300,000 $ 248,250 Land
The following book and fair values were available for Westmont Company as of March 1. |
Book Value | Fair Value | |||||
Inventory | $ | 300,000 | $ | 248,250 | ||
Land | 816,000 | 1,085,250 | ||||
Buildings | 2,050,000 | 2,375,500 | ||||
Customer relationships | 0 | 822,750 | ||||
Accounts payable | (100,000 | ) | (100,000 | ) | ||
Common stock | (2,000,000 | ) | ||||
Additional paid-in capital | (500,000 | ) | ||||
Retained earnings 1/1 | (395,000 | ) | ||||
Revenues | (454,500 | ) | ||||
Expenses | 283,500 | |||||
Arturo Company pays $3,470,000 cash and issues 24,300 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmonts common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,800 and Arturo pays $47,400 for legal fees to complete the transaction. |
Prepare Arturos journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
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