During the current year, Brewer Company acquired all of the outstanding common stock of Miller Inc. paying $11,900,000 cash. The book values and fair values of Miller's assets and liabilities acquired are listed below: Book Value Fair ValueAccounts receivable$1,750,000 $1,575,000 Inventories 2,600,000 3,900,000 Property, plant, and equipment 8,900,000 11,525,000 Accounts payable 2,900,000 2,900,000 Bonds payable 4,400,000 4,025,000 Prepare the journal entry to record the acquisition by Brewer Company.

Solution: Under the Acquisition method, majority cases of the Buyer or Purchaser are recorded the…

Answered: During the current year, Brewer Company…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

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During the current year, Brewer Company acquired all of the outstanding common stock of Miller Inc. paying $11,900,000 cash. The book values and fair values of Miller's assets and liabilities acquired are listed below:

	Book Value		Fair Value
Accounts receivable	$	1,750,000		$	1,575,000
Inventories		2,600,000			3,900,000
Property, plant, and equipment		8,900,000			11,525,000
Accounts payable		2,900,000			2,900,000
Bonds payable		4,400,000			4,025,000
Prepare the journal entry to record the acquisition by Brewer Company.

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