Question

the time, America d. copyright ation on January 1, 2016. At the time RE12.9 Grand Champion Inc. purchased America's Sweethearts Corporatio LO 12.5 Sweethearts had the following assets and liabilities (stated at fair value) Cash $ 62,000 Accounts receivable 138,000 Inventory 185,000 Property, plant, and equipment 300,000 Patent 65,000 Accounts payable 200,000 Notes payable 325,000 Grand Champion paid $900.000 for America's Sweethearts. Record the purchase by Grand Champion

Answer 1

Answer:

Particulars	Amount ($)	Amount ($)
Fixed Assets:
Property plant & equipment		300,000
Intangible Assets:
Patent		65,000
Current Assets:
Cash	62,000
Account Receivable	138000
Inventory	185000
Total current Assets	385000
Accounts payable	200000
Notes payable	325000
Total current liability	525000	(140000)
Net Assets		225000

Journal Entry:

S.No	Particulars	Debit ($)	Credit ($)
1	Net Asset	$225,000
	Goodwill	$675,000
	Cash		$900,000
	(Being goodwill purchased for $675000)