Question

On July 1, 2020, Martinez Corporation purchased Young Company by paying $259,000 cash and issuing a $128,000 note payable to Steve Young. At July 1, 2020, the balance sheet of Young Company was as follows.

Cash		$50,400		Accounts payable		$206,000
Accounts receivable		89,500		Stockholders’ equity		238,500
Inventory		105,000				$444,500
Land		41,500
Buildings (net)		75,300
Equipment (net)		70,900
Trademarks		11,900
		$444,500

The recorded amounts all approximate current values except for land (fair value of $60,400), inventory (fair value of $126,100), and trademarks (fair value of $15,680).

Partially correct answer iconYour answer is partially correct.

Prepare the July 1 entry for Martinez Corporation to record the purchase. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

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List of Accounts

  

  

Partially correct answer iconYour answer is partially correct.

Prepare the December 31 entry for Martinez Corporation to record amortization of intangibles. The trademark has an estimated useful life of 4 years with a residual value of $4,440. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

Answer 1

Account Titles and Explanation	Debit	Credit
Cash	50400
Accounts receivable	89500
Inventory	126100
Land	60400
Buildings	75300
Equipment	70900
Trademarks	15680
Goodwill	104720
Accounts payable		206000
Note payable		128000
Cash		259000
Account Titles and Explanation	Debit	Credit
Amortization expense	1405		=(15680-4440)/4*6/12
Trademarks		1405