Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

Exercise 22

Asset versus stock acquisition. Barton Company is contemplating the acquisition of the net assets of Crowley Company for $850,000 cash. To complete the transaction, acquisition costs are $15,000. The balance sheet of Crowley Company on the purchase date is as follows:
1. Record the acquisition of the net assets of Crowley Company on Barton Company's books.
2. Record the sale of the net assets on the books of Crowley Company.
3. Record the acquisition of 100% of the common stock of Crowley Company on Barton's books. Crowley Company will remain a separate legal entity.