Prepare the july 1 entry for a1 to record the purchase

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Question

On July 1, 2017 A1 company Purchased the net assets of B2 company by paying 415000 in cash and issuing a 50000 note payable to B2. At July 1, 2017, the statement of financial position of B2 was as follows:

Cash 75000

Accounts Receivable 102000

Inventory 98000

Land 50000

Buildings (net) 75000

Equipment (net) 90000

Trademarks (net) 49000

Total Assets 539000

Accounts Payable 300000

B2, Capital 239000

Total Liabilities and Equity 539000

The recorded amounts all approximate current values except for land (worth 6000), inventory (worth 125000) and trademarks (worthless).

The receivables are shown net of an allowance for doubtful accounts of 12000. The amounts for buildings, equipment and trademarks are shown net of accumulated amortization of 14000, 23000 and 47000 respectively.

Q: Prepare the July 1, 2017 entry for A1 to record the purchase.

Reference no: EM132354295

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