Marino Company Balance Sheet January 1, 2016 1 Cash $10,000.00 Accounts payable
ID: 2449971 • Letter: M
Question
Marino Company
Balance Sheet
January 1, 2016
1
Cash
$10,000.00
Accounts payable
$30,000.00
2
Inventory
40,000.00
Notes payable
100,000.00
3
Property, plant, and equipment
200,000.00
4
Patent
20,000.00
Shareholders’ equity
140,000.00
5
$270,000.00
On January 1, 2016, Paul Company purchased Marino by acquiring all its outstanding shares for $300,000 cash. On that date, the fair value of the inventory was $30,000, and the fair value of the equipment was $240,000. In addition, the fair value of a previously unrecorded customer list was $25,000. For all other amounts, the book value of January 1, 2016, equaled fair value.
Required:
$270,000.00
Marino Company
Balance Sheet
January 1, 2016
Explanation / Answer
1)
Liabilities:
Accounts payable = $30,000.00
Notes payable = $ 100,000.00
Shareholders’ equity =$$300,000
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Total = $430,000
Assets
Cash =$10,000
Accounts Receivable = $25,000(unrecorded customer list )
Inventory=$30,000(fairvalue decreaed $10,000)
Equipment =$240,000(fairvalue increased$40,000)
Patent=$20,000
Good will=$103,000(balancing Figure)
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Total = $430,000
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2)
Date Particulars LF Debit Credit
01/01/2016 Investment in Shareholders’ equity Marino A/c $300,000
To CAsh A/c $300,000
(Being Investment made Marino has recorded)
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