During the current year, Brewer Company acquired all of the outstanding common s

Question

During the current year, Brewer Company acquired all of the outstanding common stock of Miller Inc.paying $12,000,000 cash. The book values and fair values of Miller's assets and liabilities acquired are:

                                                                                                 Book Value                             Fair Value

Aaccounts receivable                                                              1,800,000                                 1,625,000

Inventory                                                                                   2,700,000                                4,000,000

Prop,Plant & Equip                                                                    9,000,000                              11,625,000

Accounts payable                                                                      3,000,000                                3,000,000

Bonds Payable                                                                           4,500,000                                4,125,000

Prepare journal entries to record the acquisition by Brewer Co.

Explanation / Answer

Journal entry to record acquisition by Brewer Co. Date Account Title Debit Credit Investment in Miller Inc. $1,20,00,000 Cash $1,20,00,000 (aquired business by cash)

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