On July 1, 2017, Novak Corporation purchased Young Company by paying $251,100 cash and issuing a $133,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as follows.
Cash $50,800 Accounts payable $206,000
Accounts receivable 91,700
Stockholders' equity 242,700 $448,700
Inventory 109,000
Land 40,200
Buildings (net) 75,100
Equipment (net) 70,000
Trademarks 11,900
$448,700
The recorded amounts all approximate current values except for land (fair value of $62,500), inventory (fair value of $125,700), and trademarks (fair value of $15,600).
Required:
Prepare the July 1 entry for Novak Corporation to record the purchase.
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