E12-12 (Accounting for Goodwill) Fred Moss, owner of MossInteriors, is negotiating for the purchase of Zweifel Galleries.The balance sheet of Zweifel is given in an abbreviated formbelow.
Liabilities and Stockholder’s Equity
Assets Liabiltiies and Stockholder’s Equity
Cash $100,000 Accountspayable 50,000
Land $70,000 Notespayables( long-term ) 300,000
Building Net $200,000 Totalliabilities 350,000
Equipment Net $175,000 Common Stock 200,000
Copyright net 30,000 Retained earnings 25,000 225,000
Total Liabilties and Stockholder’s equity 575,000
Moss and Zweifel agree that :
1. Land is undervalued by 30,000
2 equipment is ocer valued by 5,000
Zweifel agrees to sell the gallary to Moss for 350,000
Instructions:
Prepare the entry to record the purchase of Zweifel’s Gallerieson Moss’s books
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