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E12-12 (Accounting for Goodwill) Fred Moss, owner of Moss Interiors,

Question : E12-12 (Accounting for Goodwill) Fred Moss, owner of Moss Interiors, : 9667

E12-12 (Accounting for Goodwill) Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel Galleries. The balance sheet of Zweifel is given in an abbreviated form below.

                                                                     Liabilities and Stockholder's Equity

Assets                                                                  Liabiltiies and Stockholder's Equity

Cash    $100,000                      Accounts payable                                50,000

Land                 $70,000            Notes payables( long- term  )           300,000                              

Building Net     $200,000        Total liabilities                                      350,000                       

Equipment Net $175,000        Common Stock 200,000

Copyright net    30,000           Retained earnings   25,000                 225,000

                                            Total Liabilties and Stockholder's equity 575,000

Moss and Zweifel agree that :

1. Land is undervalued by 30,000

2 equipment is ocer valued by 5,000

Zweifel agrees to sell the gallary to Moss for 350,000

Instructions:

Prepare the entry to record the purchase of Zweifel's Galleries on Moss's books

Solution
5 (1 Ratings )

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Finance 2 Years Ago 141 Views
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