Exercise 12-13 On July 1, 2014, Brigham Corporation purchased Young Company by p

Question

Exercise 12-13 On July 1, 2014, Brigham Corporation purchased Young Company by paying $260,590 cash and issuing a $151,900 note payable to Steve Young. At July 1, 2014, the balance sheet of Young Company was as follows. Cash $50,400 Accounts payable $204,830 Accounts receivable 91,760 Stockholders’ equity 239,170 Inventory 103,520 $444,000 Land 40,700 Buildings (net) 75,230 Equipment (net) 70,860 Trademarks 11,530 $444,000 The recorded amounts all approximate current values except for land (fair value of $80,670), inventory (fair value of $125,100), and trademarks (fair value of $16,424). Prepare the July 1 entry for Brigham Corporation to record the purchase. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

Purcahse entry in the books of Bringham corporation Dr Cr Cash $50400 Accounts receivable 91760 Inventory (Fair value) 125100 Land (fair Value) 80670 Buliding (net) 75230 Equipment 70860 Trademark 16424 Goodwill (the difference of cr and dr line items) 106876 Cash 260590 Notes Payable 151900 Accounts payable 204830 (Being assets and liabilities incorporated at cost/fair value of Young company,

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