Question

Spur Corporation reported the following   balance sheet amounts on December 31, 20X1:
Balance Sheet Item	Historical Cost		Fair Value
Assets
Cash & Receivables	$              54,000		$               33,000
Inventory	$           112,000		$             147,000
Land	$              48,000		$               25,000
Plant & Equipment	$           410,000		$             343,000
Less: Accumulated   Depreciation	$          (156,000)
Patent			$             110,000
Total Assets	$             468,000		$               658,000
Liabilities and Equities
Accounts Payable	$              65,000		$               70,000
Common Stock	$           197,000
Additional Paid-In Capital	$              19,000
Retained Earnings	$           187,000
Total Liabilities &   Equities	$             468,000
Required:
Planket acquired Spur Corporation’s assets and liabilities for   $678,000 cash on December 31, 20X1. Give the entry that Planket made to   record the purchase. (If no entry is required for a transaction/event,   select "No journal entry required" in the first account field.)

Answer 1

PARTICULLAR	DEBIT		CREDIT
CASH & RECEIVABLE	$              33,000
INVENTORY	$           147,000
LAND	$              25,000
PLAN & EQUIPEMENT	$           343,000
PATENT	$           110,000
GOODWILL	$              90,000			[$678000 - ($658000 -   $70000)]
ACCOUNTS PAYABLE			$               70,000
CASH			$678,000