Samantha's Sporting Goods had net assets consisting of the following:
$\begin{array}{lll}&\text { Book Value }&\text { Fair Value }\\\text { Cash } & \$ 150,000 & \$ 150,000 \\\text { Inventory } & 820,000 & 960,000 \\\text { Building and Fixtures } & 330,000 & 310,000 \\\text { Liabilities } & (90,000) & (88,000)\end{array}$ Pedic Incorporated purchased Samantha's Sporting Goods,and immediately dissolved Samantha's as a separate legal entity.
Requirement 1: If Samantha's was purchased for $1,000,000 cash,prepare the entry recorded by Pedic.
Requirement 2: If Samantha's was purchased for $1,500,000 cash,prepare the entry recorded by Pedic.

Question

Samantha's Sporting Goods had net assets consisting of the following:

\begin{array}{lll}&\text { Book Value }&\text { Fair Value }\\\text { Cash } & \$ 150,000 & \$ 150,000 \\\text { Inventory } & 820,000 & 960,000 \\\text { Building and Fixtures } & 330,000 & 310,000 \\\text { Liabilities } & (90,000) & (88,000)\end{array}

Pedic Incorporated purchased Samantha's Sporting Goods,and immediately dissolved Samantha's as a separate legal entity.
Requirement 1: If Samantha's was purchased for $1,000,000 cash,prepare the entry recorded by Pedic.
Requirement 2: If Samantha's was purchased for $1,500,000 cash,prepare the entry recorded by Pedic.

Quizplus · Accepted Answer

The Answer of Samantha's Sporting Goods had net assets consisting of the following: $\begin{array}{lll}&\text { Book Value }&\text { Fair Value }\ \text { Cash } & \$ 150,000 & \$ 150,000 \ \text { Inventory } & 820,000 & 960,000 \ \text { Building and Fixtures } & 330,000 & 310,000 \ \text { Liabilities } & (90,000) & (88,000) \end{array}$ Pedic Incorporated purchased Samantha's Sporting Goods,and immediately dissolved Samantha's as a separate legal entity. Requirement 1: If Samantha's was purchased for $1,000,000 cash,prepare the entry recorded by Pedic. Requirement 2: If Samantha's was purchased for $1,500,000 cash,prepare the entry recorded by Pedic.

Samantha's Sporting Goods Had Net Assets Consisting of the Following