On June 30,2011,Stampol Company Ceased Operations and All of Their

question 31

Essay

On June 30,2011,Stampol Company ceased operations and all of their assets and liabilities were purchased by Postoli Incorporated.Postoli paid $40,000 in cash to the owner of Stampol,and signed a five-year note payable to the owners of Stampol in the amount of $200,000.Their closing balance sheets as of June 30,2011 are shown below.In the purchase agreement,both parties noted that Inventory was undervalued on the books by $10,000,and Pistoli would also take possession of a customer list with a fair value of $18,000.Pistoli paid all legal costs of the acquisition,which amounted to $7,000.
Required:
1.Prepare the journal entry Postoli would record at the date of acquisition.
2.Prepare the journal entry Stampol would record at the date of acquisition.

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Definitions:

Ethernet Port

An RJ-45 port that connects a device to the wired network.

RJ-45

A connector standard predominantly used for Ethernet networking, facilitating wired connections between networked devices.

Antistatic Bag

A plastic enclosure that protects electronic gear from being affected by static charges if the equipment is left exposed.

Motherboards

The main circuit board of a computer, to which all other components connect directly or indirectly.