Question - On July 1, 2017, Brigham Corporation purchased Young Company by paying $250,000 cash and issuing a $100,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as follows.
Cash $50,000
Accounts payable $200,000
Accounts receivable 90,000
Stockholders' equity 235,000
Inventory 100,000
Land 40,000
Buildings (net) 75,000
Equipment (net) 70,000
Trademarks 10,000
The recorded amounts all approximate current values except for land (fair value of $60,000), inventory (fair value of $125,000), and trademarks (fair value of $15,000).
Prepare the July 1 entry for Brigham Corporation to record the purchase.