Home / Questions / The following book and fair values were available for Westmont Company as of March 1.
The following book and fair values were available for Westmont Company as of March 1.
| Book Value | Fair Value | |||||
| Inventory | $ | 296,000 | $ | 242,750 | ||
| Land | 766,500 | 1,034,250 | ||||
| Buildings | 2,150,000 | 2,453,000 | ||||
| Customer relationships | 0 | 846,750 | ||||
| Accounts payable | (106,500 | ) | (106,500 | ) | ||
| Common stock | (2,000,000 | ) | ||||
| Additional paid-in capital | (500,000 | ) | ||||
| Retained earnings 1/1 | (428,000 | ) | ||||
| Revenues | (467,000 | ) | ||||
| Expenses | 289,000 | |||||
Arturo Company pays $3,400,000 cash and issues 25,400 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,300 and Arturo pays $51,100 for legal fees to complete the transaction.
Prepare Arturo’s journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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