1.The Horstmeyer Corporation commenced operations early in 2013. A number of expenditures were made during 2013 that were debited to one account called intangible asset. A recap of the $644,000 balance in this account at the end of 2013 is as follows:
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The total amount paid for the Stiltz Corp. stock was debited to this account. The fair values of Stiltz Corp.'s assets and liabilities on the date of the acquisition were as follows:
Receivables ............. $ 100,000
Equipment ............. 350,000
Patent ............... 150,000
Total assets ............. 600,000
Note payable assumed ........ (220,000)
Fair value of net assets ........ $ 380,000
Required:
Prepare the necessary journal entries to clear the intangible asset account and to setup