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Purchase of a Company Landers Inc is considering purchasing J&B Properties which has the following assets and liabilities Cost Fair Market Value Accounts receivable

Purchase of a Company

Landers Inc. is considering purchasing J&B Properties, which has the following assets and liabilities.

 

Cost

Fair Market Value

Accounts receivable

$ 210,000

$ 200,000

Inventory

250,000

260,000

Prepaid insurance

12,000

12,000

Buildings and equipment (net)

88,000

168,000

Accounts payable

(130,000)

(130,000)

Net assets

$ 430,000

$ 510,000

1. Make the journal entry necessary for Landers Inc. to record the purchase if the purchase price is $650,000 cash.

2. Assume that the purchase price is $320,000 cash. Make the journal entry necessary to record the purchase.

Jun 17 2020 View more View Less

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