Prepare the entry to record the purchase of terrell

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Reference no: EM13484585

Fred Graf, owner of Graf Interiors, is negotiating for the purchase of Terrell Galleries. The balance sheet of Terrell is given in an abbreviated form below.

TERRELL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2012
Assets		Liabilities and Stockholders' Equity
Cash	$100,000	Accounts payable		$50,000
Land	70,000	Notes payable (long term)		300,000
Buildings (net)	200,000	Total liabilities		350,000
Equipment (net)	175,000	Common stock	$200,000
Copyrights (net)	30,000	Retained earnings	25,000	225,000
Total assets	$575,000	Total liabilities and stockholders' equity		$575,000

Graf and Terrell agree that:

1.		Land is undervalued by $50,000.
2.		Equipment is overvalued by $5,000.

Terrell agrees to sell the gallery to Graf for $380,000.
Prepare the entry to record the purchase of Terrell Galleries on Graf's books.

Reference no: EM13484585

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