Bigga Corporation purchased the net assets of Petit,Inc.on January 2,2011 for $380,000 cash and also paid $15,000 in direct acquisition costs.Petit,Inc.was dissolved on the date of the acquisition.Petit's balance sheet on January 2,2011 was as follows:
Fair values agree with book values except for inventory,land,and equipment,which have fair values of $260,000,$35,000 and $35,000,respectively.Petit has patent rights with a fair value of $20,000.
Required:
Prepare Bigga's general journal entry for the cash purchase of Petit's net assets.

Question

Bigga Corporation purchased the net assets of Petit,Inc.on January 2,2011 for $380,000 cash and also paid $15,000 in direct acquisition costs.Petit,Inc.was dissolved on the date of the acquisition.Petit's balance sheet on January 2,2011 was as follows:
  Fair values agree with book values except for inventory,land,and equipment,which have fair values of $260,000,$35,000 and $35,000,respectively.Petit has patent rights with a fair value of $20,000.
Required:
Prepare Bigga's general journal entry for the cash purchase of Petit's net assets.

Quizplus · Accepted Answer

The Answer of Bigga Corporation purchased the net assets of Petit,Inc.on January 2,2011 for $380,000 cash and also paid $15,000 in direct acquisition costs.Petit,Inc.was dissolved on the date of the acquisition.Petit's balance sheet on January 2,2011 was as follows:
  Fair values agree with book values except for inventory,land,and equipment,which have fair values of $260,000,$35,000 and $35,000,respectively.Petit has patent rights with a fair value of $20,000.
Required:
Prepare Bigga's general journal entry for the cash purchase of Petit's net assets.

Bigga Corporation Purchased the Net Assets of Petit,Inc