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h Edition Ebook.pdf- Adobe Acrobat Reader DC mediate Accou.. 701 (737 of 1646) 125% - . E12-12 (Accounting for Goodwill) Fred Graf, owner of Graf Interiors, is negotiating for the purchase Terrell Galleries. The balance sheet of Terrell is given in an abbreviated form below. TERRELL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2012 Assets Cash Land Buildings (net) Equipment (net) Copyrights (net) Total assets $100,000 70,000 200,000 Liabilities and Stockholders' Equity Accounts payable Notes payable (long term) 50,000 300,000 s200,000 350,000 225,000 Total liabilities 175,000 Common stock 30,000 Retained earnings 25,000 $575,000 Total liabilities and stockholders' equity $575,000 Graf and Terrell agree that: 1. Land is undervalued by $50,000. 2. Equipment is overvalued by $5,000. Terrell agrees to sell the gallery to Graf for $380,000. nstructions Prepare the entry to record the purchase of Terrell Galleries on Graf's books
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