Problem 2-30 (LO 2-4, 2-5, 2-6a) Allerton Company acquires all of Deluxe Company

Question

Problem 2-30 (LO 2-4, 2-5, 2-6a) 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: Fair Values Building Land tradenark $ 52,500 52,500 47,050 31,100 0 34,800 90,750 16,500 Liabilities Common stock 16,500 (41,250) 41,250) (100,000) (35,000) 1&2. Prepare Allerton's entry to record its acquisition of Deluxe in its accounting records assuming the following cash exchange amounts: $150,000 and $102,000. (If no entry is required for a tra account field.) n/event, select "No journal entry required" in the first Journal entry worksheet Record the acquisition of Delex assuming the cash exchange of $150,000 iNext

Explanation / Answer

1 Current Assets 52500 Building 47050 Land 31100 Trademark 34800 Goodwill 25800 =(150000+41250)-(52500+47050+31100+34800)      Liabilities 41250      Cash 150000 2 Current Assets 52500 Building 47050 Land 31100 Trademark 34800      Gain on Bargain Purchase 22200 =(52500+47050+31100+34800)-(102000+41250)      Liabilities 41250      Cash 102000

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