(Answered) Question - the following book and fair values were

Accounting

Question - The following book and fair values were available for Westmont Company as of March 1.

Book Value Fair Value

Inventory $ 630,000 $ 600,000

Land 750,000 990,000

Buildings 1,700,000 2,000,000

Customer relationships 0 800,000

Accounts payable (80,000) (80,000)

Common stock (2,000,000)

Additional paid-in capital (500,000)

Retained earnings 1/1 (360,000)

Revenues (420,000)

Expenses 280,000

Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmonts common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,000 and Arturo pays $42,000 for legal fees to complete the transaction.

Prepare Arturos journal entry to record its acquisition of Westmont.

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