Question

PLEASE HELP! Thanks!!

The following book and fair values were available for Westmont Company as of March 1. $ Book Value 406,000 817,5ee 2, ees, eee Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Fair Value $363,500 1,687,see 2,314,75e 868,5ee (128,500) (128,500) (2,eee eee) (500,000) (424,500) (482,500) 307,000 Arturo Company pays $4,150,000 cash and issues 22,800 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont's common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $33,500 and Arturo pays $44,000 for legal fees to complete the transaction. Prepare Arturo's journal entries 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.)

Answer 1

Ans: Journal Entry

Date	Account title and explanation	Debit($)	Credit($)
	Inventory	363,500
	Land	1,087,500
	Buildings	2,314,750
	Customer Relationships	868,500
	Goodwill	784,250
	Accounts payable		128,500
	Common Stock{22,800*2}		45,600
	Additional Paid in capital{22,800*48}		1,094,400
	Cash		4,150,000
	{ to record the takeover of assets and liabilities}
	Legal Fees	44,000
	cash		44,000
	{ to record legal fees related to combination}
	Stock issue costs	33,500
	Cash		33,500
	{ to record the payment of stock issuance costs}