| The following book and fair values were available for Westmont Company as of March 1. |
| Book Value | Fair Value | |||||
| Inventory | $ | 231,000 | $ | 191,750 | ||
| Land | 822,000 | 1,119,750 | ||||
| Buildings | 2,130,000 | 2,447,250 | ||||
| Customer relationships | 0 | 867,750 | ||||
| Accounts payable | (104,000 | ) | (104,000 | ) | ||
| Common stock | (2,000,000 | ) | ||||
| Additional paid in capital | (500,000 | ) | ||||
| Retained earnings 1/1 | (417,500 | ) | ||||
| Revenues | (464,500 | ) | ||||
| Expenses | 303,000 | |||||
|
|
||||||
Note: Parentheses indicate a credit balance.
|
Arturo Company pays $3,780,000 cash and issues 28,700 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont%u2019s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $32,800 and Arturo pays $47,500 for legal fees to complete the transaction. |
|
Prepare Arturo%u2019s journal entry to record its acquisition of Westmont.
|