Question

Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:

 

  Book
Values
    Fair
Values
 
Current assets $ 20,250     $ 20,250  
Building   110,250       65,150  
Land   17,250       28,550  
Trademark   0       34,600  
Goodwill   37,500       ?  
Liabilities   (50,250 )     (50,250 )
Common stock   (100,000 )        
Retained earnings   (35,000 )        
 

1&2. Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $132,000 and $86,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

 

 

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