Question

In: Accounting

Anas corp. decides to purchase Hind Inc. on December 31, 2017. The purchase price that Anas...

Anas corp. decides to purchase Hind Inc. on December 31, 2017. The purchase price that Anas Crop pays to buy Hind Inc is as follows: 10,000

Hind Inc's statement of financial position is as follows on December 31, 2017:

assets:

PP&E: 1

Inventories: 2

supplies: 3

Accounts receivable: 4

cash: 5

total assets: 15

Equity and Liabilities:

Share and capitals: 3

Retained earnings 1

current liabilities: 11

Total equity and liabilities: 15

Hind Inc's fair values on december 31, 2017 are as follows:

pp&e 11

inventories 12

supplies 1

accounts receivable 3

cash 4

share capital 5

retained earnings 7

current liabilities 9

(I AM NOT SUPER CONCERNED ABOUT NUMBERS I WANNA KNOW WHICH ACCOUNTS I USE)

Prepare the journal entry to record Anas corp's purchase on hind inc

account	debit	credit

Expert Solution

Answer
	journal entry to record Anas corp's purchase on hind inc
	particulrs	Debit	Credit
	For Businesss Purchase
1)	Business purchase account	10000
	To Hind Inc		10000

	for assets and liabilities agreed to take over
2)	pp&e	11
	inventories	12
	supplies	1
	accounts recivable	3
	cash	4
	To current liabilities		9
	To Business purchase		10000

note:	If the credits exceed the debits, the difference is Goodwill and should be debited as such
	If the debits exceed the credits, the difference is capital profit and should be credited to capital reserve

	on payment to Hind Inc
3)	Hind Inc	10000
	To Cash		10000

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