Question

On July 1, 2020, Blue Corporation purchased Young Company by paying $257,700 cash and issuing a $123,000 note payable to Steve Young. At July 1, 2020, the balance sheet of Young Company was as follows. Cash $50,800 Accounts payable $204,000 Accounts receivable 89,900 Stockholders' equity 235,800 Inventory 102,000 $439,800 Land 40,200 Buildings (net) 75,000 Equipment (net) 70,300 Trademarks 11,600 $439,800 The recorded amounts all approximate current values except for land (fair value of $63,100), inventory (fair value of $125,300), and trademarks (fair value of $15,280).

Answer 1

Answer Credit Journal Entry Date Account Titles and Explanation July, 1 Cash Accounts Receivable Inventory Land Building (net) Equipment (net) Trademarks Goodwill Accounts Payable Note Payable Cash (To record the Purchases) Debit $50,800 $89,900 $125,300 $63,100 $75,000 $70,300 $15,280 $95,020 $204,000 $123,000 $257,700 2 Credit Debit $1,325 Date Account Titles and Explanation December, 31 Amortization Expense [($15,280 - $4,680) / 4 yrs x 6/12] Trademarks (To record the amortization expense) $1,325