You have been given the following information for Ethan Company as of June 1, 2010. Ethan Company purchased a parcel of land and then incurred specific costs for the construction of a new building.
Below is a list of these costs: Cost of Parking Lot and gates=$14,000 Cost of filling the building site= $10,000 Legal Fees to buy land= $2,000 Cost of driveway= $9,000
Property Taxes for Jan 1,2010 to June 1, 2010= $5,000 Title Insurance= $2,000 Interest on the construction loan= $13,000 Proceeds from the sale of salvage materials= ($1500)
Purchase price of land= $200,000 Cost of the building construction= $650,000 Cost of razing building on lot= $9,500 Cost of grading the lot= $5,000 On April 25, 2010, Bullseye Company purchased all of the outstanding common stock of Vista Company, paying $14,000,000.
The book values and fair values of Vista's assets and liabilities acquired are shown below in dollar amounts: Accounts Book Value Fair Value Accounts Receivables $1,900,000 $1,725,000 Inventories $2,800,000 $4,000,000 Accounts Payable $2,000,000 $2,000,000 Property, Plant and Equipment $8,000,000 $12,625,000 Bonds Payable $4,600,000 $4,225,000