On July 1, 2014, Brigham Corporation purchased Young Company by paying $253,030
ID: 2498155 • Letter: O
Question
On July 1, 2014, Brigham Corporation purchased Young Company by paying $253,030 cash and issuing a $150,950 note payable to Steve Young. At July 1, 2014, the balance sheet of Young Company was as follows.
$50,220
$204,490
89,830
236,680
101,640
$441,170
41,920
75,980
70,190
11,390
$441,170
The recorded amounts all approximate current values except for land (fair value of $80,130), inventory (fair value of $127,690), and trademarks (fair value of $14,984).
Prepare the July 1 entry for Brigham Corporation to record the purchase.
Cash$50,220
Accounts payable$204,490
Accounts receivable89,830
Stockholders’ equity236,680
Inventory101,640
$441,170
Land41,920
Buildings (net)75,980
Equipment (net)70,190
Trademarks11,390
$441,170
Explanation / Answer
Account Title & Explanation Debit credit Business Purchase 403980 Young Company 403980 Account Title & Explanation Debit credit Young Company 403980 Cash 253030 Note Payable 150950 Account Title & Explanation Debit Credit Cash 50220 Account receivable 89830 Inventory 127690 Land 80130 Building 75980 Equipment 70190 Trademarks 14984 Goodwill 99446 Account Payable 204490 Business Purchase 403980