Q on 1st january 20x8 alaska corporation acquired

Assignment Help Financial Accounting

Reference no: EM13351774

Q: On 1^st January, 20X8, Alaska Corporation acquired Mercantile Corporation's net assets by paying $160,000 cash. Balance sheet data for the two companies and fair value information for Mercantile Corporation instantly before the business combination are shown below:

Alaska Mercantile

Book Value Book Value Fair Value

Cash $200,000 $30,000 $30,000

Accounts receivable 40,000 22,000 22,000

Inventory 120,000 25,000 36,000

Patents 50,000 20,000 40,000

Buildings and Equipm. 330,000 250,000 150,000

Less: Acc. Deprec. -140,000 -150,000

Total Assets $600,000 $197,000 $278,000

Accounts payable $85,000 $55,000 $55,000

Notes Payable 100,000 80,000 80,000

Common Stock:

$5 par value 120,000

$2 par value 20,000

Additional Paid-In Capital 140,000 25,000

Retained Earnings 155,000 17,000

Total Liabilities And Equities $600,000 $197,000

Required:

Purpose the journal entry to record the acquisition of Mercantile Corporation.

Reference no: EM13351774

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