On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuinga $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was asfollows:ww wwwMinor CompanyBalance Sheetwwww n nAssetsLiabilities and Owners' Equity$40,000$55,000280,000$335,000CashNotes PayableCapitalAcc. Receivable80,000InventoryBuildings(net)Equipment(net)PatentsTrademarks120,00050,00030,0005,00010,000$335,000wwAn appraisal indicated that the fair market value of the receivables was $75,000, and thefair market value of inventory and buildings were $110,000 and $70,000 respectively.According to the appraisal, the patents were worthless.Required: Prepare the journal entry to be record the purchase by Grand Corp.ww w

The journal entry to be recorded by Grand Co for the purchase of Minor Co is shown hereunder :

On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: wwwwww Minor Company Balance Sheet Assets Liabilities and Owners' Equity $40,000 $55,000 280,000 $335,000 Cash Notes Payable binimin Acc. Receivable 80,000 Capital 120,000 Inventory Buildings(net) Equipment(net) Patents 50,000 30,000 5,000 Trademarks 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp. www

On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: wwwwww Minor Company Balance Sheet Assets Liabilities and Owners' Equity $40,000 $55,000 280,000 $335,000 Cash Notes Payable binimin Acc. Receivable 80,000 Capital 120,000 Inventory Buildings(net) Equipment(net) Patents 50,000 30,000 5,000 Trademarks 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp. www

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Described below are certain transactions of Pharoah Company for 2021: On May 10, the company purchased goods from Fox Company for $74,900, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 1. On June 1, the company purchased equipment for $96,000 from Rao Company, paying $31,200 in cash and giving a one- year, 9% note for the balance. 2. On September 30, the company discounted at 11% its $220,000, one-year zero-interest-bearing note at Virginia State Bank, receiving $198,000. 3.
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On July 1, 2020, Brigham Corporation purchased Young Company by paying $250,000 cash and issuing a $100,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as follows. Cash $ 50,000 Accounts payable $200,000 Accounts receivable 90,000 Stockholders' equity 235,000 Inventory 100,000 $435,000 Land 40,000 Buildings (net) 75,000 Equipment (net) 70,000 Trademarks 10,000 $435,000 The recorded amounts all approximate current values except for land (fair value of $60,000), inventory (fair value of $125,000), and trademarks (fair value of $15,000). Instructions a. Prepare the July 1 entry for Brigham Corporation to record the purchase. b. Prepare the December 31 entry for Brigham Corporation to record amortization of intangibles. The trademark has an estimated useful life of 4 years with a residual value of $3,000.
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On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: 1. Minor Company Balance Sheet Assets Liabilities and Owners' Equity Cash $40,000 Notes Payable $55,000 Acc. Receivable 80,000 Capital 280,000 Inventory 120,000 $335,000 Buildings(net) Eguipment(net) 50,000 30,000 Patents 5,000 Trademarks 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the apRraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp.
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Abe Manufacturing Corp. decided to expand further by purchasing the net assets of ERB Manufacturing Corp. ERB's statement of financial position at December 31, 2023 follows. Assets Receivables Inventory Plant assets (net) Total assets ERB MANUFACTURING CORP. Statement of Financial Position December 31, 2023 Cash 450,000 275,000 1,025,000 $1,960,000 $ 210,000 Liabilities and Equities Accounts payable $ 325,000 Common shares 800,000 Retained earnings 835,000 Total liabilities and equities $1,960,000 An appraisal, agreed to by both parties, indicated that the fair value of the inventory was $320,000 and the fair value of the plant assets was $1,225,000. The fair value of the receivables and payables is equal to the amount reported on the balance sheet. The agreed purchase price was $3 million, and this amount was paid in cash to the owners of ERB. Instructions Calculate the amount of goodwill (if any) implied in the purchase price of $3 million. Show calculations.
Fool’s Paradise Ltd had cash and cash equivalents at 1 January 2019 of $400,000. The transactions ofFool’s Paradise Ltd for the year to 31 December 2019 are as follows: Borrowed $850,000 with a 9-month loan payable Received $6,340,000 cash for customer accounts Sold for $360,000 cash a plant asset with a carrying amount of $180,000 Issued ordinary shares for $480,000 cash Purchased a plant asset for $650,000; $237,500 in cash and $412,500 in loan Exchanged 60,000 shares for land with a fair value of $1,000,000 Received a $350,000 dividend in cash Received $25,000 interest from term deposit Invested $500,000 cash on the short-term money market Paid fixed-term loan principal of $900,000 and interest of $90,000 Cash payments for supplier’s accounts $6,300,000 Dividend paid during the period $200,000 Wages expense shown in the income statement is $75,000. At the end of the year the balancesheet shows prepaid Wages expense of $65,000. There was a prepaid Wages expense of…
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