On September 1, 2020, Luigi Corp purchased Mario Enterprises for a cash payment of $863,000....
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On September 1, 2020, Luigi Corp purchased Mario Enterprises for a cash payment of $863,000. At the time of the purchase, Marios Balance Sheet showed Inventory at $220,000, Equipment at $100,000, Building at $550,000, Trademarks at $30,000, liabilities of $460,000, and equity of $440,000. At the date of purchase, the book value of the equipment is determined as being overstated by $20,000, the book value of the building is determined as being understated by $100,000 and the Trademarks are determined worthless. Required: Prepare the required journal entry in Luigis books on September 1, 2020 to record the purchase (including goodwill).
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