Exercise 1212 On July 1 2017 Grouper Corporation purchased Y

Exercise 12-12 On July 1, 2017, Grouper Corporation purchased Young Company by paying $259,700 cash and issuing a $149,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as follows Cash Accounts receivable Inventory Land Buildings (net) Equipment (net) Trademarks $50,600 92,000 105,000 41,800 75,500 71,400 11,400 $447,700 Accounts payable $205,000 Stockholders\' equity242,700 $447,700 The recorded amounts all approximate current values except for land (fair value of $64,500), inventory (fair value of $126,800), and trademarks (fair value of $17,280)

Solution

2) Dr Amortization Expense $825

Cr Trademarks $825

Trademarks = ([$11,400 - $4,800] x 1/4 x 6/12 = $825

Account Titles and Explanation	Debit	Credit
Cash	$          50,600
Accounts Receivable	$          92,000
Inventory	$        126,800
Land	$          64,500
Buildings	$          75,500
Equipment	$          71,400
Trademarks	$          17,280
Goodwill	$        115,620
Cash		$ 259,700
Accounts Payable		$205,000
Notes Payable		$149,000