Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Wildhorse
ID: 2585710 • Letter: F
Question
Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Wildhorse Galleries. The balance sheet of Wildhorse is given in an abbreviated form below.
WILDHORSE GALLERIES
BALANCE SHEET
AS OF DECEMBER 31, 2017
Assets
Liabilities and Stockholders’ Equity
$110,000
$51,000
70,500
308,000
200,500
359,000
175,500
$225,100
30,500
2,900
228,000
$587,000
$587,000
Moss and Wildhorse agree that:
Wildhorse agrees to sell the gallery to Moss for $379,700.
Prepare the entry to record the purchase of Wildhorse Galleries on Moss’s books. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
k
WILDHORSE GALLERIES
BALANCE SHEET
AS OF DECEMBER 31, 2017
Assets
Liabilities and Stockholders’ Equity
Cash$110,000
Accounts payable$51,000
Land70,500
Notes payable (long-term)308,000
Buildings (net)200,500
Total liabilities359,000
Equipment (net)175,500
Common stock$225,100
Copyrights (net)30,500
Retained earnings2,900
228,000
Total assets$587,000
Total liabilities and stockholders’ equity$587,000
Explanation / Answer
Particulars
Dr. Amount
Cr. Amount
Cash
Land (70,500 + 35,600)
Buildings
Equipment (175,500 – 4,800)
Copyrights
Goodwill (Balancing Figure)
TO Accounts Payable
TO Notes Payable
TO Wildhorse Galleries
(Being Business purchased of Wild horse)
110,000
106,100
200,500
170,700
30,500
120,900
51,000
308,000
379,700
Particulars
Dr. Amount
Cr. Amount
Cash
Land (70,500 + 35,600)
Buildings
Equipment (175,500 – 4,800)
Copyrights
Goodwill (Balancing Figure)
TO Accounts Payable
TO Notes Payable
TO Wildhorse Galleries
(Being Business purchased of Wild horse)
110,000
106,100
200,500
170,700
30,500
120,900
51,000
308,000
379,700
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.