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Asset versus stock acquisition. Bart Company is contemplating the acquisition of the net assets of Crow Company for $800,000 cash. To complete the transaction, acquisition costs are $15,000. The balance sheet of Crow Company on the purchase date is as follows:
Assets
Liabilities and Equity
Current assets .
$ 80,000
Liabilities
$100,000
Land.
50,000
Common stock ($10 par). .
100,000
Building
450,000
Paid-in capital in excess of par
150,000
Accumulated depreciation-building .
(200,000)
Retained earnings .
230,000
Equipment
300,000
Accumulated depreciation-equipment .
(100,000)
Total assets. .
$ 580,000
Total liabilities and equity .
$580,000
The following fair values have been obtained for Crow's identi?able assets and liabilities:
Current assets
Land. .
75,000
Building .
Equipment .
275,000
102,000
1. Record the acquisition of the net assets of Crow Company on Bart Company's books.
2. Record the sale of the net assets on the books of Crow Company.
3. Record the acquisition of 100% of the common stock of Crow Company on Bart's books. Crow Company will remain a separate legal entity.
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