On July 1, 2018, Aeroplus Corporation purchased Johnson Company by paying $187,500 cash and issuing a $65,000 note payable to Steve Johnson. At July 1, 2018, the balance sheet of Johnson Company was as follows: Cash $ 38,500Accounts payable$160,000Receivables 66,500Stockholders’ equity 166,250Inventory 75,000$326,250Land 30,000Buildings (net) 56,250Equipment (net) 52,500Copyrights 7,500 $326,250The recorded amounts all approximate current values except for land (worth $45,000), inventory (worth $93,750), and copyrights (worth $11,250).Instructions(a) Prepare the July 1 entry for Aeroplus Corporation to record the purchase.(b) Prepare the December 31 entry for Aeroplus Corporation to record amortization of intangibles. The copyrights have an estimated useful life of 4 years with a residual value of $2,450.
On July 1, 2018, Aeroplus Corporation purchased Johnson Company by paying $187,500 cash and issuing a $65,000 note payable to Steve Johnson. At July 1, 2018, the balance sheet of Johnson Company was as follows: Cash $ 38,500Accounts payable$160,000Receivables 66,500Stockholders’ equity 166,250Inventory 75,000$326,250Land 30,000Buildings (net) 56,250Equipment (net) 52,500Copyrights 7,500 $326,250The recorded amounts all approximate current values except for land (worth $45,000), inventory (worth $93,750), and copyrights (worth $11,250).Instructions(a) Prepare the July 1 entry for Aeroplus Corporation to record the purchase.(b) Prepare the December 31 entry for Aeroplus Corporation to record amortization of intangibles. The copyrights have an estimated useful life of 4 years with a residual value of $2,450.
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