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  • Oct 28, 2012, 04:15 PM
    gethelp12
    entries for acquistion assets
    1.On July 6 Rommel Company acquired the plant assets of Studebaker Company, which had discontinued operations. The appraised value of the property is:





    Land

    $400,000





    Building

    1,200,000





    Machinery and equipment


    800,000





    Total


    $2,400,000



    Rommel Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a fair value of $180 per share on the date of the purchase of the property.


    2.Rommel Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building.





    Repairs to building

    $105,000





    Construction of bases for machinery to be installed later

    135,000





    Driveways and parking lots

    122,000





    Remodeling of office space in building, including new partitions and walls

    161,000





    Special assessment by city on land

    18,000



    3.On December 20, the company paid cash for machinery, $280,000, subject to a 2% cash discount, and freight on machinery of $10,500.

    Prepare entries on the books of Rommel Company for these transactions.

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