60.1K

Verified Solution

Link Copied!

On June 30, 2021, Streeter Company reported the following account balances: Iteceivables Inventory Buildings (net) Equipment (net) Total assets $51,700 Current liabilities 87,000 Long term liabilities 83,700 Common stock 34,000 Retained earnings $ 256,400 Total liabilities and equities $ (10, 100) (56,000) (90,000) (100,000) $(256,400) On June 30, 2021, Princeton Company paid $309,500 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $17,300 in legal fees. Princeton also agreed to pay $61,100 to the former owners of Streeter contingent on meeting certain revenue goals during 2022. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $20.300. In determining its offer, Princeton noted the following pertaining to Streeter: It holds a building with a fal value $40,500 more than its book value. It has developed a customer list appraised at $29,200, although it is not recorded in its financial records It has research and development activity in process with an appraised fair value of $33,300. However, the project has not yet reached technological feasibility and the assets used in the activity have no alternative future use. Book values for the receivables, inventory, equipment and liabilities approximate for values Prepare Princeton's accounting entries to record the combination with Streeter, (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer & Explanation Solved by verified expert

See Answer