Question

The following book and fair values were available for Westmont Company as of March 1 Book Value Fair Value $ 245,500 $ 203,750 820,500 1,072,500 2,115,000 2,457,750 833,250 Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings 1/1 Revenues Expenses (96,0)96,000) (2,000,000) (500,000) (413,000) (494,000) 322,000 Arturo pays cash of $4,275,250 to acquire Westmont. No stock is issued and Arturo pays $51,200 for legal fees to complete the transaction Prepare Arturo's journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 1 Record the acquisition of Westmont Company 2 Record the legal fees related to the combination

Answer 1

Account Titles and Explanation	Debit	Credit
Inventory	$   2,03,750
Land	$ 10,72,500
Buildings	$ 24,57,750
Customer relationships	$   8,33,250
Accounts payable		$       96,000
Cash		$ 42,75,250
Gain on bargain purchase		$   1,96,000
(Being Assets and Liabilities taken over)
Professional service expenses	$       51,200
Cash		$       51,200
(Being Professional service expense recorded)