Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel G
ID: 2459706 • Letter: F
Question
Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel Galleries. The balance sheet of Zweifel is given in an abbreviated form below.
ZWEIFEL GALLERIES
BALANCE SHEET
AS OF DECEMBER 31, 2014
Assets
Liabilities and Stockholders’ Equity
$116,610
$50,560
71,160
304,270
200,700
354,830
178,080
$234,000
30,240
7,960
241,960
$596,790
$596,790
Moss and Zweifel agree that:
Zweifel agrees to sell the gallery to Moss for $380,780.
Prepare the entry to record the purchase of Zweifel Galleries on Moss’s books.
ZWEIFEL GALLERIES
BALANCE SHEET
AS OF DECEMBER 31, 2014
Assets
Liabilities and Stockholders’ Equity
Cash$116,610
Accounts payable$50,560
Land71,160
Notes payable (long-term)304,270
Buildings (net)200,700
Total liabilities354,830
Equipment (net)178,080
Common stock$234,000
Copyrights (net)30,240
Retained earnings7,960
241,960
Total assets$596,790
Total liabilities and stockholders’ equity$596,790
Explanation / Answer
Cash debit $ 116610
Land debit $ 122170
Buildings debit $ 200700
Equipment debit $ 173020
Copyrights debit $ 30240
Goodwill debit $ 92870
Accounts payable credit $ 50560
Notes Payable credit $ 304270
Cash credit $ 380780
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