Make the journal entry to record the purchase

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Reference no: EM132052412

Question - Sandstone Co. purchased Derby Co. for $2,500,000. The following schedule shows the market value of Derby's assets and liabilities on the purchase date:

Assets

Cash $400,000

Receivables $300,000

Inventory $500,000

Land Buildings Equipment $1,100,000

Total Assets $2,300,000

Liabilities

Current $150,000

Long-term $225,000

Total Liabilities $375,000

Net assets market value $1,925,000

Required:

A. Make the journal entry to record the purchase.

B. Make the journal entry if the purchase was for $1,725,000.

C. Make the journal entry if the purchase was for $725,000.

Reference no: EM132052412

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