Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018,...

Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair values were available for the Deluxe Company accounts:

	Book Values			Fair Values
Current assets	$	61,000		$	61,000
Building		91,750			44,650
Land		31,000			45,700
Trademark		0			37,600
Goodwill		15,000			?
Liabilities		(63,750	)		(63,750	)
Common stock		(100,000	)
Retained earnings		(35,000	)

1&2. Prepare Allerton’s entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $152,000 and $112,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the acquistion of Delax assuming the cash exchange of $152,000

Record the acquistion of Delax assuming the cash exchange of $112,00

Transaction	General Journal	Debit	Credit
1)


2)

Expert Solution

Case-1
Journal Entries
Account title and explanations	Debit $	Credit $
Current Assets Account Dr.	61000
Building Account Dr.	44650
Land Account Dr.	45700
Trademark Account Dr.	37600
Good will Account Account	26800
Liabilities Account		63750
Cash Account		152000

Case-2
Journal Entries
Account title and explanations	Debit $	Credit $
Current Assets Account Dr.	61000
Building Account Dr.	44650
Land Account Dr.	45700
Trademark Account Dr.	37600
Liabilities Account		63750
Cash Account		112000
Retained earnings		13200

ekkarill92 answered 1 year ago

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