Problem - CPA Corporation purchased the net assets of CMA Corporation on January 2, 2003 for $280,000 and also paid $10,000 in direct acquisition costs. CMA's balance sheet on January 1, 2003 was as follows:
Accounts receivable-net $ 90,000 Current liabilities $ 35,000
Inventory 180,000 Long term debt 80,000
Land 20,000 Common stock ($1 par) 10,000
Building-net 30,000 Paid-in capital 215,000
Equipment-net 40,000 Retained earnings 20,000
Total assets $360,000 Total liab. & equity $360,000
Fair values agree with book values except for inventory, land, and equipment, that have fair values of $200,000, $25,000 and $35,000, respectively. CMA has patent rights valued at $10,000.
Required: Prepare CPA's general journal entry for the cash purchase of CMA's net assets. Do not use implied fair value.