Reference no: EM132739937
Question - Edward Moss, owner of Moss Interiors, is negotiating for the purchase of Sunland Galleries. The balance sheet of Sunland is given in an abbreviated form below.
Assets
Cash 118,000
Land 71,300
Building (net) $201,300
Equipment (net) $176,300
Copyright (net) $31,300
Total assets $598,200
Liabilities and Stockholder equity
Accounts payable $51,000
Notes payable (long term) $303,300
Total liabilities $354,300
Common stock $210,900
Retained earnings $33,000
Total liability and stockholder equity $598200
Moss and Sunland agree that:
1. Land is undervalued by $30,000.
2. Equipment is overvalued by $5,000.
Sunland agrees to sell the gallery to Moss for $350,000.
Required - Prepare the entry to record the purchase of Sunland Galleries on Moss's books. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.