Saveed Corporation Purchased the Net Assets of Penny Inc

question 5

Essay

Saveed Corporation purchased the net assets of Penny Inc.on January 2,2013 for $1,690,000 cash and also paid $15,000 in direct acquisition costs.Penny dissolved as of the date of the acquisition.Penny's balance sheet on January 2,2013 was as follows:
Fair values agree with book values except for inventory,land,and equipment,which have fair values of $640,000,$140,000 and $230,000,respectively.Penny has customer contracts valued at $20,000.
Required:
Prepare Saveed's general journal entry for the cash purchase of Penny's net assets.

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Definitions:

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior.

Spontaneous Recovery

The reappearance of a response (conditioned response) that had been extinguished after some time has passed without exposure to the conditioned stimulus.

Respondent Behavior

Behavior that occurs as an automatic response to a certain stimulus, not requiring conscious thought.

Sniffing

The act of inhaling through the nose to detect smells, which can also refer to the abuse of inhalant substances for recreational purposes.