Problem: Prepare the entry to record the purchse of Terrell Galleries on Graf's books
Graff and Terrell agree that:
1. Land is undervalued by $50,000
2. Equipment is overvalued by $5,000
Terrell agrees to sell the gallery to Graf for $380,000
Terrell Galleries
Balance Sheet
As Of December 31, 2012
Assets Liabilities and Stockholders' Equity
Cash $100,000 Accounts payable $ 50,000
Land 70,000 Notes payable(long term) 300,000
Buildings (Net) 200,000 ________
Equipment (Net) 175,000 Total liabilities 350,000
Coprights (Net) 30,000 Common stock $200,000
__________ Retained earnings 25,000
_______225,000
Total Assets $575,000 Total liab and stockholders' equity $575,000