Part A -On July 1, 2014, Brigham Corporation purchased Young Company by paying $250,000 cash and issuing a $100,000 note payable to Steve Young. At July 1, 2014, the balance sheet of Young Company was as follows.
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Cash
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$50,000
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Accounts payable
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$200,000
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Accounts receivable
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90,000
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Stockholders' equity
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235,000
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Inventory
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100,000
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$435,000
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Land
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40,000
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Buildings (net)
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75,000
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Equipment (net)
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70,000
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Trademarks
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10,000
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$435,000
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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.
Account Title Debit Credit
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11.
Part B -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 $3,000.
Account Title Debit Credit
1.
2.