Business, 25.02.2020 23:18 firdausmohammed80

Barstow Company is contemplating the acquistion of the net assets of Crown Company for $875,000 cash. To complete the transaction, acquisition costs are $15,000. The balance sheet of Crown Company on the purchase date is as follows:

Crown CompanyBalance SheetDecember 31, 2015

Assets Liabilities and Equity

Current Assets$80,000 Liabilities$100,000

Land$70,000 Common Stock ($10 par)$100,000

Building$450,000 Paid-in capital in excess of par$150,000

Accumulated depreciation---building(200,000) Retained Earning$250,000

Equipment$300,000

Accumulated depreciationequipment(100,000)

Total Assets$600,000 Total Liabilities and Equity$600,000

The following fair values have been obtained for Crown's identifiable assets and liabilities:

Current Assets$85,000

Land$90,000

Building$300,000

Equipment$275,000

Liabilities$102,000

1. Record the acquisition of the net assets of Crown Company on Barstow Company's Books.

2. Record the sale of the net assets on the books of Crown Company.

3. Record the acquisition of 100% of the common stock of Crown Company on Barstow's books. Crown Company will remain a sperate legal entity.

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Barstow Company is contemplating the acquistion of the net assets of Crown Company for $875,000 cash...