Question

Exercise 12-12 On July 1, 2020, Pina Corporation purchased Young Company by paying $255,400 cash and issuing a $138,000 note payable to Steve Young. At July 1, 2020, the balance sheet of Young Company was as follows. Cash $50,800 Accounts payable $208,000 Accounts receivable 92,000 Stockholders’ equity 239,200 Inventory 107,000 $447,200 Land 40,100 Buildings (net) 75,000 Equipment (net) 71,300 Trademarks 11,000 $447,200 The recorded amounts all approximate current values except for land (fair value of $60,600), inventory (fair value of $126,800), and trademarks (fair value of $16,400).

Prepare the July 1 entry for Pina Corporation to record the purchase. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT

Prepare the December 31 entry for Pina Corporation to record amortization of intangibles. The trademark has an estimated useful life of 4 years with a residual value of $3,720. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Answer 1

Answer
Journal entry for Purchase
		Debit	Credit
01-Jul	Cash	$        50,800
	Accounts receivable	$        92,000
	Inventory (Fair value)	$      126,800
	land (fair value)	$        60,600
	Buildings (net)	$        75,000
	Equipment (net)	$        71,300
	trademarks (fair value)	$        16,400
	Good wiil (balancing Figure )	$      108,500
	Accounts payable		$   208,000
	Cash (Purchase consideration )		$   255,400
	Notes payable		$   138,000
	(To record Business Purchased and Good will recorded )
31-Dec	Amotization Expesne - Trademark	$          3,170
	Accumulated Amortization - Trademark		$       3,170
	(To Record amortization recorded = 16400-3720/4)