Determine the amount fortune corporation

Reference no: EM131099591

Bargain Purchase

Using the data presented in E1-13, determine the amount Fortune Corporation would record as a gain on bargain purchase and prepare the journal entry Fortune would record at the time of the exchange if Fortune issued bonds with a par value of $580,000 and a fair value of $564,000 in completing the acquisition of Sorden.

E1-13:

Balance Sheet Item	Historical Cost	Fair Value
Cash & Receivables	$ 55,000	$ 50,000
Inventory	105,000	200,000
Land	60,000	100,000
Plant & Equipment	400,000	300,000
Less: Accumulated Depreciation	(150,000)
Goodwill	10,000
Total Assets	$480,000	$650,000
Accounts Payable	$ 50,000	$ 50,000
Common Stock	100,000
Additional Paid-In Capital	60,000
Retained Earnings	270,000
Total Liabilities & Equities	$480,000

Reference no: EM131099591

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