Wonderland, Inc. purchased Cheshire Co. for $ 960 comma 000 $960,000. The market value of Cheshire's...

Question

Question

Wonderland, Inc. purchased Cheshire Co. for $ 960 comma 000 $960,000. The market value of Cheshire's...

Wonderland, Inc. purchased Cheshire Co. for $ 960 comma 000 $960,000. The market value of Cheshire's assets and liabilities at the time of purchase were $ 950 comma 000 $950,000 and $ 280 comma 000 $280,000 respectively. The journal entry to record this will include:

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Assets acquired = $950,000

Liabilities acquired = $280,000

Purchase consideration = $960,000

Goodwill = Purchase consideration + Liabilities acquired - Assets acquired

= 960,000 + 280,000 - 950,000

= $290,000

Journal

Account Title	Debit	Credit
Assets	950,000
Goodwill	290,000
Liabilities		280,000
Cash		960,000

kindly give a positive rating if you are satisfied with the solution. Please ask if you have any query related to the question, Thanks.

Add a comment

Answer 2

Similar Homework Help Questions

Wonderland, Inc. purchased Cheshire Co.for $880,000. The market value of Cheshire's assets and liabilities at the...

Wonderland, Inc. purchased Cheshire Co.for $880,000. The market value of Cheshire's assets and liabilities at the time of purchase were $970,000 and $320.000 respectively. The journal entry to record this will include: O O O A. debit to Investments for $970.000, credit to Cash $880,000 and credit to Gain on Investment $90,000 B. debit to Investments for $880.000, credit to Cash $880,000 C. debit to Asset accounts for $970,000, credit to Gain on Investments $90,000 and credit to Cash $880,000...
Mighty Mountain Mining paid $ 442 comma 700 for the right to extract mineral assets from a 450 co...

Mighty Mountain Mining paid $ 442 comma 700 for the right to extract mineral assets from a 450 comma 000-ton deposit. In addition to the purchase price, Mighty also paid a $ 300 filing fee, a $ 2 comma 000 license fee to the state of Nevada, and $ 50 comma 000 for a geological survey of the property. Because Mighty purchased the rights to the minerals only and did not purchase the land, it expects the asset to have...
Technologies Inc. began 20172017 with inventory of $ 25 comma 000$25,000. During the year, ParklandParkland purchased...

Technologies Inc. began 20172017 with inventory of $ 25 comma 000$25,000. During the year, ParklandParkland purchased inventory costing $ 110 comma 000$110,000 and sold goods for $ 155 comma 000$155,000, with all transactions on account. ParklandParkland ended the year with inventory of $ 34 comma 000$34,000. Journalize all the necessary transactions under the periodic inventory system. Requirement 1. Journalize all the necessary transactions under the periodic inventory system. (Record debits first, then credits. Explanations are not required.) First, journalize the...

On January 2, 2017, Snug Clothing Consignments purchased showroom fixtures for $ 12 comma 000 cash,...

On January 2, 2017, Snug Clothing Consignments purchased showroom fixtures for $ 12 comma 000 cash, expecting the fixtures to remain in service for five years. Snug has depreciated the fixtures on a double-declining-balance basis, with zero residual value. On September 30 comma 2018, Snug sold the fixtures for $ 6 comma 200 cash. Record both depreciation expense for 2018 and sale of the fixtures on September 30, 2018. (Record debits first, then credits. Select the explanation on the last...
8. On MayMay 15, 20182018, StaceyStacey Co. invests $ 12 comma 000$12,000 in MaxMax, Inc. stock....

8. On MayMay 15, 20182018, StaceyStacey Co. invests $ 12 comma 000$12,000 in MaxMax, Inc. stock. MaxMax pays StaceyStacey a $ 900$900 dividend on NovemberNovember 15, 20182018. StaceyStacey sells the MaxMax stock on DecemberDecember 10, 20182018, for $ 11 comma 800$11,800. Assume the StaceyStacey Co. does not have significant influence over MaxMax, Inc. Journalize the 20182018 transactions related to StaceyStacey's investment in MaxMax stock. (Record debits first, then credits. Select the explanation on the last line of the journal entry...
thank you Potters has acquired several other companies. Assume that Potters purchased Kelleher for $12,000,000 cash....

thank you Potters has acquired several other companies. Assume that Potters purchased Kelleher for $12,000,000 cash. The book value of Kelleher's assets is $12,000,000 (market value, $18,000,000), and it has liabilities of $11,000,000 (market value, $11,000,000). Requirements Compute the cost of goodwill purchased by Potters Record the purchase of Kelleher by Potters. 2. Requirement 1. Compute the cost of goodwill purchased by Potters Purchase price to acquire Kelleher Market value of Kelleher's assets Less: Market value of Kelleher's liabilities Less:...

thank you Potters has acquired several other companies. Assume that Potters purchased Kelleher for $12,000,000 cash....

thank you Potters has acquired several other companies. Assume that Potters purchased Kelleher for $12,000,000 cash. The book value of Kelleher's assets is $12,000,000 (market value, $18,000,000), and it has liabilities of $11,000,000 (market value, $11,000,000). Requirements Compute the cost of goodwill purchased by Potters Record the purchase of Kelleher by Potters. 2. Requirement 1. Compute the cost of goodwill purchased by Potters Purchase price to acquire Kelleher Market value of Kelleher's assets Less: Market value of Kelleher's liabilities Less:...
16) Joe, Inc. purchased a competitor in 2010 for $950,000. The results of an appraisal of...

16) Joe, Inc. purchased a competitor in 2010 for $950,000. The results of an appraisal of the value of the assets and liabilities of the competitor is below: Fair Value ($) Cash 100,000 Accounts Receivable 200,000 Inventory 1,000,000 Property, Plant and Equipment 1,500,000 Accounts Payable 810,000 Notes Payable 1,200,000 Prepare the journal entry to record the acquisition? 17) Related to (16) above, an internal analysis of Joe, Inc. performed on December 31, 2012 indicated that the fair value of the...
INTERMEDIATE (Questions 13-22) LO 1 13. Market Values and Book Values Klingon Widgets, Inc., purchased new...

INTERMEDIATE (Questions 13-22) LO 1 13. Market Values and Book Values Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $6 million. The machinery can be sold to the Romulans today for $4.6 million. Klingon's current balance sheet shows net fixed assets of $3.15 million, current liabilities of $830,000, and net working capital of $210,000. If all the current accounts were liquidated today, the company would receive $950,000 in cash. What is the book value of Klingon's total...

Pitney Co. purchased an office building, land, and furniture for $747,600 cash. The appraised value of the assets was as...

Pitney Co. purchased an office building, land, and furniture for $747,600 cash. The appraised value of the assets was as follows: Land $ 92,104 Building 267,940 Furniture 477,268 Total $ 837,312 Required a. Compute the amount to be recorded on the books for each asset. b. Show the purchase in a horizontal statements model like the following one: c. Prepare the general journal entry to record the purchase.

Wonderland, Inc. purchased Cheshire Co. for $ 960 comma 000 $960,000. The market value of Cheshire's...

Homework Answers

Add Answer to:
Wonderland, Inc. purchased Cheshire Co. for $ 960 comma 000 $960,000. The market value of Cheshire's...

Post as a guest

Earn Coins

Wonderland, Inc. purchased Cheshire Co.for $880,000. The market value of Cheshire's assets and liabilities at the...

Mighty Mountain Mining paid $ 442 comma 700 for the right to extract mineral assets from a 450 co...

Technologies Inc. began 20172017 with inventory of $ 25 comma 000$25,000. During the year, ParklandParkland purchased...

On January 2, 2017, Snug Clothing Consignments purchased showroom fixtures for $ 12 comma 000 cash,...

8. On MayMay 15, 20182018, StaceyStacey Co. invests $ 12 comma 000$12,000 in MaxMax, Inc. stock....

thank you Potters has acquired several other companies. Assume that Potters purchased Kelleher for $12,000,000 cash....

thank you Potters has acquired several other companies. Assume that Potters purchased Kelleher for $12,000,000 cash....

16) Joe, Inc. purchased a competitor in 2010 for $950,000. The results of an appraisal of...

INTERMEDIATE (Questions 13-22) LO 1 13. Market Values and Book Values Klingon Widgets, Inc., purchased new...

Pitney Co. purchased an office building, land, and furniture for $747,600 cash. The appraised value of the assets was as...

Wonderland, Inc. purchased Cheshire Co. for $ 960 comma 000 $960,000. The market value of​ Cheshire's...

Homework Answers