Solution-Prepare Hillsburg general journal entry for cash

Prepare Hillsburg general journal entry for cash purchase

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Reference no: EM132735552

Question - Hillsburg Corporation purchased the net assets of Marvel Inc. on January 2, 2019 for $1,690,000 cash and also paid $15,000 in direct acquisition costs. Marvel dissolved as of the date of the acquisition. Marvel's balance sheet on January 2, 2019 was as follows:

Accounts receivable-net	$190,000	Current liabilities	$235,000
Inventory	480,000	Long term debt	650,000
Land	110,000	Common stock ($1 par)	25,000
Building-net	630,000	Paid-in capital	150,000
Equipment-net	240,000	Retained earnings	590,000
Total assets	$1,650,000	Total liab. & equity	$1,650,000

Fair values agree with book values except for inventory, land, and equipment, which have fair values of $640,000, $140,000 and $230,000, respectively. Marvel has customer contracts valued at $20,000.

Required - Prepare Hillsburg's general journal entry for the cash purchase of Marvel's net assets.

Reference no: EM132735552

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Prepare Hillsburg general journal entry for cash purchase

Reference no: EM132735552

Reference no: EM132735552

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