Reference no: EM132783137
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.