$50,500 $202,000 91,800 244,900 106,000 $446,900 41,900 75,800 69,500 11,400 $44

Question

$50,500

$202,000

91,800

244,900

106,000

$446,900

41,900

75,800

69,500

11,400

$446,900

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

On July 1, 2017, Bramble Corporation purchased Young Company by paying $251,000 cash and issuing a $106,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as follows.
Cash

$50,500

Accounts payable

$202,000

Accounts receivable

91,800

Stockholders’ equity

244,900

Inventory

106,000

$446,900

Land

41,900

Buildings (net)

75,800

Equipment (net)

69,500

Trademarks

11,400

$446,900

The recorded amounts all approximate current values except for land (fair value of $64,900), inventory (fair value of $127,500), and trademarks (fair value of $16,560).

Explanation / Answer

Cash Account Dr. 50500 Accounts recievable Dr 91800 Inventory Dr. 127500 land Dr. 64900 Building Dr. 75800 Equipment Dr. 69500 Trademarks Dr. 16560 Good Will Dr. (balancing figure) 62440 Accounts Payable 202000 Notes Payable 106000 Cash Account 251000 (for purchase of company and amount paiid for goodwill as well) Amortization Expense Account Dr. 1565      Trademarks Account 1565 (for amortization of trademarks) Note: Annual Amortization= Book value of Intangibles - Salvage /Life Annual Amortization: 16560 -4040 /4 =3130 Amortization expense for the year (6 months) = 3130*6/12 = $1,565

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