Problem 2122 Points) Peterson Corporation purchased the net assets of Scarberry Corporation on January 2, 2011, for $560

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Problem 2122 Points Peterson Corporation Purchased The Net Assets Of Scarberry Corporation On January 2 2011 For 560 1 (42.83 KiB) Viewed 58 times

Problem 2122 Points) Peterson Corporation purchased the net assets of Scarberry Corporation on January 2, 2011, for $560,000 and also paid $20,000 in direct acquisition costs. Scarberry's balance sheet on January 1, 2011 was as follows: Book Value Fair Value Assets Account receivable-net $180,000 $180,000 Inventories 360,000 400,000 Land 40,000 50,000 Building-net 60,000 60,000 Equipment-net 80.000 70.000 Total assets $720.000 $760.000 Liabilities Current liabilities $ 70,000 $ 70,000 Long-term debt 160,000 160,000 Scarberry has patent rights valued at $20,000. Instructions a. Prepare Peterson's journal entry to record the purchase of Scarberry's net assets. b. Assume Peterson Corporation purchased the net assets of Scarberry Corporation for $500,000 rather than $560,000. Prepare the journal entry to record the purchase.