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question fred moss owner of moss interiors is negotiating for thepurchase of zweifel 4279733

Question

Fred Moss, owner of Moss Interiors, is negotiating for thepurchase of Zweifel Galleries. The balance sheet of Zweifel isgiven in an abbreviated form below.

ZWEIFEL GALLERIES

BALANCE SHEET

AS OF DECEMBER 31, 2014

Assets

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

Cash

 

$116,610

 

Accounts payable

 

 

 

$50,560

Land

 

71,160

 

Notes payable (long-term)

 

 

 

304,270

Buildings (net)

 

200,700

 

   Total liabilities

 

 

 

354,830

Equipment (net)

 

178,080

 

Common stock

 

$234,000

 

 

Copyrights (net)

 

30,240

 

Retained earnings

 

7,960

 

241,960

Total assets

 

$596,790

 

Total liabilities and stockholders’ equity

 

 

 

$596,790

                 

 

Moss and Zweifel agree that:

1.

 

Land is undervalued by $51,010.

2.

 

Equipment is overvalued by $5,060.

 

Zweifel agrees to sell the gallery to Moss for $380,780.

 

Prepare the entry to record the purchase of Zweifel Galleries onMoss’s books.

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