Allerton Company acquires all of Deluxe Company’s assets and liabilities for cas
ID: 2485376 • Letter: A
Question
Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2015, 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 $ 52,500 $ 52,500 Building 90,750 47,050 Land 16,500 31,100 Trademark 0 34,800 Goodwill 16,500 ? Liabilities (41,250) (41,250) Common stock (100,000) Retained earnings (35,000) Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) (1) $150,000.Record the aquisiton methds entry for the merger with delux company. 2. 102,000 Record the aquistion entry for bargin purchase under the aqusition method with delux company.
Explanation / Answer
Journal Entry to record merger
(1)
Current assets
52,500
Building
47,050
land
31,100
Trademark
34,800
Goodwill
25,800
To liabilities
41,250
To Cash
150,000
(2)
Current assets
52,500
Building
47,050
Land
31,100
Trademark
34,800
To Purchase on bargain
22,200
To liabilities
41,250
To Cash
102,000
Current assets
52,500
Building
47,050
land
31,100
Trademark
34,800
Goodwill
25,800
To liabilities
41,250
To Cash
150,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.