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Flauer [41]
3 years ago
7

Assume an investor purchases the net assets of an investee for the cash purchase price is $75,600. The investor is willing to pu

rchase the investee's business for this amount because the fair value of PPE is $70,560 and the fair value of a (previously unrecognized) customer list is $15,120 (the fair values of all other assets and liabilities are equal to their book values). The investee company reports the following balance sheet on the acquisition date:
Cash $2,800 Accounts payable $5,600
Accounts receivable 5,600 Accrued liabilities 8,400
Inventories 11,200 -
Current assets 19,600 Current liabilities 14,000
Long-term liabilities 11,200
PPE, net 28,000 Stockholdersâ equity 22,400
Total assets $47,600 Total liabilities and equity $47,600

Required:
Provide the journal entry if the investor pays cash and purchases the assets and assumes the liabilities of the investee company (assume that the fair value of the assets is equal to their book values).
Business
1 answer:
maxonik [38]3 years ago
4 0

Answer and Explanation:

The journal entry is given below;

Cash                         $2,800

Account receivable $5,600

Inventories                $11,200

PPE                            $28,000

     To Account payable $5,600

     To Accrued liabilities $8,400

     To Long term liabilities  $11,200

     To Cash                          $22,400

(Being the cash is paid is recorded)

Here all the assets are debited as it increased the assets and credited all the liabilities except cash as it increased the liabilities and the remaining balance left would be credited to cash account

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financial freedom

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What are the benefits of "inventory pooling"? Establishing pools of inventory at each supplier and customer locationsCentralizes
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Answer:

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Explanation:

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8 0
3 years ago
Novak Corp. bought equipment on January 1, 2022. The equipment cost $390000 and had an expected salvage value of $35000. The lif
nirvana33 [79]

Answer:

$177,000

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In order to find the book value of the equipment we need to find the amount of depreciation per year. To do this we need to subtract the salvage value from the initial cost and then simply divide by 5 which is the life span of the equipment...

(390,000 - 35,000) / 5 = x

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3 years ago
Read 2 more answers
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