On January 1, July 1, and December 31, 20X5, a Condensed

question 31

Essay

On January 1, July 1, and December 31, 20X5, a condensed trial balance for Nelson Company showed the following debits and (credits):
$\begin{array}{lrrr}&01 / 01 / \mathrm{X} 5&06 / 30 /X5&12 / 31 /X 5\\\text { Current Assets } & \$ 200,000 & \$ 260,000 & \$ 340,000 \\\text { Plant and Equipment (net) } & 500,000 & 510,000 & 510,000 \\\text { Current Liabilities } & (50,000) & (70,000) & (60,000) \\\text { Long-Term Debt } & (100,000) & (100,000) & (100,000) \\\text { Common Stock } & (150,000) & (150,000) & (150,000)\\\text { Other Paid-in Capital } & (100,000) & (100,000) & (100,000) \\\text { Retained Earnings, January 1 } & (300,000) & (300,000) & (300,000)\\\text { Dividends Declared }&&&10,000\\\text { Revenues } && (400,000) & (900,000) \\\text { Expenses } && 350,000 & 750,000\end{array}$ Assume that, on July 1, 20X5, Systems Corporation purchased the net assets of Nelson Company for $750,000 in cash. On this date, the fair values for certain net assets were:
$\begin{array}{lr}\text { Current Assets } & \$ 280,000 \\\text { Plant and Equipment (remaining life of } 10 \text { years) } & 600,000\end{array}$ Nelson Company's books were NOT closed on June 30, 20X5.
For all of 20X5, Systems' revenues and expenses were $1,500,000 and $1,200,000, respectively.
Required:
(1)
Record the entry on Systems' books for the July 1, 20X5 purchase of Nelson.

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