Prepare the July entry for Grouper Corporation

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Question - On July 1, 2020, Grouper Corporation purchased Young Company by paying $253,500 cash and issuing a $139,000 note payable to Steve Young. At July 1, 2020, the balance sheet of Young Company was as follows.

Cash

$50,900

Accounts payable

$208,000

Accounts receivable

90,600

Stockholders' equity

243,400

Inventory

110,000

 

$451,400

Land

41,800

 

 

Buildings (net)

75,700

 

 

Equipment (net)

71,400

 

 

Trademarks

11,000

 

 

 

$451,400

 

 

The recorded amounts all approximate current values except for land (fair value of $64,300), inventory (fair value of $127,000), and trademarks (fair value of $16,880).

Required - Prepare the July 1 entry for Grouper Corporation to record the purchase.

Reference no: EM133069535

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