ABC company purchased the net assets of XYZ company for $680,000. On the date of
ID: 2437880 • Letter: A
Question
ABC company purchased the net assets of XYZ company for $680,000. On the date of acquisition, XVZ had assets (other than goodwill) with a book value of $1,000,000 and a fair value of $1,050,000, and liabilities with a book and fair value of $350,000. Which of the following should be included in the entry prepared by ABC to record the acquisition of XYZ. 32. a. b. c. d. e. Debit Assets $1,050,000 Debit Investment in XYZ $1,050,000 Debit Gain on Acquisition of Business $20,000 Debit Goodwill $20,000 Both A and CExplanation / Answer
Answer is a. Debit Assets $ 1050000 Expanation: The Journal entry for acquisition: Sundry Assets Account Dr. 1,050,000 Liabilities Account 350,000 Cash account 680,000 Gain on Acquisition of business Account 20000