Question 2
On July 1, 2017, Bramble Corporation purchased Cullumber Company by paying $177,000 cash and issuing a $132,750 note payable to Jay Cullumber. At July 1, 2017, the balance sheet of Cullumber Company was as follows.
Cash
$24,500
Accounts payable
$221,300
Accounts receivable
89,100
Stockholders' equity
210,400
Inventory
127,100
$431,700
Land
28,500
Buildings (net)
67,900
Equipment (net)
74,700
Trademarks
19,900
$431,700
The recorded amounts all approximate current values except for land (fair value of $61,300), inventory (fair value of $131,900), and trademarks (fair value of $26,470).
Prepare the July 1 entry for Bramble Corporation to record the purchase. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
Prepare the December 31 entry for Bramble Corporation to record amortization of intangibles. The trademark has an estimated useful life of 8 years with a residual value of $870. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit