On June 10, 20X8, Tower Corporation acquired 100 percent of Brown Company's common stock. Summarized...
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Accounting
On June 10, 20X8, Tower Corporation acquired 100 percent of Brown Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows:
Tower Corp.
Brown Company
Item
Book Value
Fair Value
Cash
$
15,000
$
5,000
$
5,000
Accounts Receivable
36,000
16,000
16,000
Inventory
91,000
22,000
27,000
Buildings & Equipment (net)
126,000
59,000
79,000
Investment in Brown Stock
131,000
Total
$
399,000
$
102,000
$
127,000
Accounts Payable
$
21,000
$
3,000
$
3,000
Bonds Payable
148,000
19,000
19,000
Common Stock
47,000
16,000
Retained Earnings
183,000
64,000
Total
$
399,000
$
102,000
$
22,000
REQUIRED:
Calculate the amount of Goodwill or Gain that resulted from the acquisition.
Prepare the workpaper eliminating journal entries.
Answer & Explanation
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