Solution-Prepare the journal entry amounts for this stock

Prepare the journal entry amounts for this stock purchase

Reference no: EM131736236

Question: Stock Purchase of Another Company

ChubbyGuy Inc. wants to purchase the outstanding stock of SkinnyGirl Inc. for purposes of horizontal consolidation and will pay $800,000 cash for it plus indirect acquisition costs of $50,000. The balance sheet for SkinnyGirl Inc. on the date of purchase is as follows:

Skinny Girl Inc.Balance Sheet as of 7/31/17
Skinny Girl Inc.Balance Sheet as of 7/31/17
Assets			Liabilities & Owners' Equity
	Book Value	Fair Market Value		Book Value	Fair Market Value
Cash	$0	$0	A/P	$30,000	$30,000
A/R	125,000	100,000	Notes Payable	75,000	75,000
Inventory	75,000	50,000	Bonds Payable	15,000	10,000
Net Fixed Assets	300,000	350,000	Total Liabilities:	$120,000
Land	25,000	200,000
Trademark	15,000	10,000	Common Stock	75,000
			Retained Earnings	345,000
			Total Equity:	$420,000

Total Assets:	$540,000		Total Liabilities & O.E.:	$540,000

A) Prepare the journal entry amounts for this stock purchase on the books of ChubbyGuy Inc. by entering the proper dollar amounts in the gray-shaded cells. When correct, the cells will change color.

Reference no: EM131736236

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Prepare the journal entry amounts for this stock purchase

Reference no: EM131736236

Reference no: EM131736236

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