Question:
On July 1, 2014, Brigham Corporation purchased Young Company by paying $257,840 cash and issuing a $150,580 note payable to Steve Young. At July 1, 2014, the balance sheet of Young Company was as follows.
|
Cash
|
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$50,700
|
|
Accounts payable
|
|
$205,920
|
|
Accounts receivable
|
|
91,670
|
|
Stockholders equity
|
|
242,040
|
|
Inventory
|
|
107,090
|
|
|
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$447,960
|
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Land
|
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41,600
|
|
|
|
|
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Buildings (net)
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74,990
|
|
|
|
|
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Equipment (net)
|
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70,510
|
|
|
|
|
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Trademarks
|
|
11,400
|
|
|
|
|
|
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$447,960
|
|
|
|
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The recorded amounts all approximate current values except for land (fair value of $79,270), inventory (fair value of $126,130), and trademarks (fair value of $17,400).
1. Prepare the December 31 entry for Brigham Corporation to record amortization of intangibles. The trademark has an estimated useful life of 4 years with a residual value of $4,640.