Exercise 12-12 (Part Level Submission) $51,400 $205,000 90,500 244,900 109,000 $

Question

Exercise 12-12 (Part Level Submission)

$51,400

$205,000

90,500

244,900

109,000

$449,900

41,100

74,600

71,500

11,800

$449,900

(a)

Account Titles and Explanation

Debit

Credit

Exercise 12-12 (Part Level Submission)

On July 1, 2017, Blue Corporation purchased Young Company by paying $258,200 cash and issuing a $146,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as follows.
Cash

$51,400

Accounts payable

$205,000

Accounts receivable

90,500

Stockholders’ equity

244,900

Inventory

109,000

$449,900

Land

41,100

Buildings (net)

74,600

Equipment (net)

71,500

Trademarks

11,800

$449,900

The recorded amounts all approximate current values except for land (fair value of $62,200), inventory (fair value of $127,800), and trademarks (fair value of $15,120).

Explanation / Answer

Account Titles and Explanation Debit Credit Inventory 127800 Goodwill 116080 Accounts Receivable 90500 Land 62200 Building 74600 Equipment 71500 Cash 51400 Trademarks 15120 Cash 258200 Accounts Payable 205000 Notes Payable 146000 (To record purchase company)

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