Samantha's Sporting Goods Had Net Assets Consisting of the Following

question 26

Essay

Samantha's Sporting Goods had net assets consisting of the following:
Pedic Incorporated purchased Samantha's Sporting Goods,and immediately dissolved Samantha's as a separate legal entity.
Requirement 1: If Samantha's was purchased for $1,000,000 cash,prepare the entry recorded by Pedic.
Requirement 2: If Samantha's was purchased for $1,500,000 cash,prepare the entry recorded by Pedic.

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Definitions:

Permanent/Temporary

Refers to accounts in accounting: permanent accounts are balance sheet accounts that carry over into the next accounting period, while temporary accounts are income statement accounts closed at the end of the accounting period.

Financial Statement

A written record that quantitatively describes the financial health of a company, including income statement, balance sheet, and cash flow statement among others.

Statement Of Cost Of Goods Manufactured

A financial report detailing the total production costs incurred by a company to produce goods over a specific period.

Ending Inventory

The final value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.