The following book and fair values were available for Westmont Company as of March 1....
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Accounting
The following book and fair values were available for Westmont Company as of March 1.
| Book Value | Fair Value | |||||
| Inventory | $ | 551,500 | $ | 515,250 | ||
| Land | 771,000 | 1,050,750 | ||||
| Buildings | 1,895,000 | 2,252,000 | ||||
| Customer relationships | 0 | 825,000 | ||||
| Accounts payable | (102,000 | ) | (102,000 | ) | ||
| Common stock | (2,000,000 | ) | ||||
| Additional paid-in capital | (500,000 | ) | ||||
| Retained earnings, 1/1 | (430,000 | ) | ||||
| Revenues | (495,500 | ) | ||||
| Expenses | 310,000 | |||||
Arturo Company pays $4,140,000 cash and issues 20,500 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmonts common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $27,600 and Arturo pays $46,900 for legal fees to complete the transaction.
Prepare Arturos journal entries to record its acquisition of Westmont.
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