Plazco acquired all the assets of Slazco in a transaction that did not qualify for pooling of interests accounting treatment. Plazco gave $400,000 cash as consideration and assumed responsibility for all of Slazco's liabilities (totaling $200,000). For simplicity, assume that Slazco's only asset was a manufacturing plant that initially cost $1,400,000, was depreciated $500,000, and had a current value (based on an appraisal) of $650,000.
Required:
Record the entries that would be made on each company's books as a result of this transaction, assuming a centralized accounting system is to be used.

Question

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The Answer of Plazco acquired all the assets of Slazco in a transaction that did not qualify for pooling of interests accounting treatment. Plazco gave $400,000 cash as consideration and assumed responsibility for all of Slazco's liabilities (totaling $200,000). For simplicity, assume that Slazco's only asset was a manufacturing plant that initially cost $1,400,000, was depreciated $500,000, and had a current value (based on an appraisal) of $650,000.
Required:
Record the entries that would be made on each company's books as a result of this transaction, assuming a centralized accounting system is to be used.

Plazco Acquired All the Assets of Slazco in a Transaction