Flint Industries purchased all the following assets and
liabilities of Protector Goods for $963,000 cash:
Book Value | Fair Value | |||
Accounts Receivable | $117,000 | $117,000 | ||
Inventory | 101,000 | 110,000 | ||
Property, Plant & Equipment (net) | 512,000 | 638,000 | ||
Land | 154,000 | 175,000 | ||
Accounts Payable | 77,000 | 77,000 | ||
Notes Payable | 113,000 | 113,000 |
Prepare the appropriate journal entries for Flint Industries on
acquisition. (If no entry is required, select "No
Entry" for the account titles and enter 0 for the amounts. Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
Account Titles and Explanation |
Debit |
Credit |
Accounts PayableAccounts ReceivableCashGoodwillInventoryLandNo EntryNotes PayableProperty, Plant and Equipment |
||
Accounts PayableAccounts ReceivableCashGoodwillInventoryLandNo EntryNotes PayableProperty, Plant and Equipment |
||
Accounts PayableAccounts ReceivableCashGoodwillInventoryLandNo EntryNotes PayableProperty, Plant and Equipment |
||
Accounts PayableAccounts ReceivableCashGoodwillInventoryLandNo EntryNotes PayableProperty, Plant and Equipment |
||
Accounts PayableAccounts ReceivableCashGoodwillInventoryLandNo EntryNotes PayableProperty, Plant and Equipment |
||
Accounts PayableAccounts ReceivableCashGoodwillInventoryLandNo EntryNotes PayableProperty, Plant and Equipment |
||
Accounts PayableAccounts ReceivableCashGoodwillInventoryLandNo EntryNotes PayableProperty, Plant and Equipment |
||
Accounts PayableAccounts ReceivableCashGoodwillInventoryLandNo EntryNotes PayableProperty, Plant and Equipment |
Goodwill = (fair value of liabilities acquired + Purchases consideration) - Fair value of assets acquired
= (Accounts payable + Note payable + Cash paid) - (Accounts receivable + Inventory + Property, Plant & Equipment + Land)
= (77,000 + 113,000 + 963,000) - (117,000 + 110,000 + 638,000 + 175,000) -
= - 190,000 - 963,000 - 1,040,000
= $113,000
Journal
Account Title and Explanation |
Debit |
Credit |
Accounts receivable | 117,000 | |
Inventory | 110,000 | |
Property, Plant & Equipment | 638,000 | |
land | 175,000 | |
Goodwill | 113,000 | |
Accounts payable | 77,000 | |
Note payable | 113,000 | |
Cash | 963,000 |
Get Answers For Free
Most questions answered within 1 hours.