During the current year, Brewer Company acquired all of the outstanding common s

Question

During the current year, Brewer Company acquired all of the outstanding common stock of miller Inc. paying $12,000,000 cash. The book values and fair values of Miller's assets and liabilities acquired are listed below: Book Value Fair Value Accounts receivable $1,800,000 $1,625,000 Inventories 2,700,000 4,000,000 Property Plant and Equipment 9,000,000 11,625,000 Accounts payable 3,000,000 3,000,000 Bonds payable 4,500,000 4,125,000 Required: Prepare the journal entry to record the acquisition by Brewer Company.

Explanation / Answer

Accounts Receivable Dr. 1625000 Inventories Dr. 4000000 Property Plant Equipment Dr.11625000 Goodwill on acquisition Dr. 1875000 Accounts Payable Cr. 3000000 Bonds Payable Cr. 4125000 Cash Cr. 12000000

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