The Edge Mfg. Company decided to expand further by purchasing the Bell Company. The balance sheet of Bell Company as of December 31, 2012 was as follows:
- Bell Company
- Balance Sheet
- December 31, 2012
- AssetsEquities
- Cash $112,000Accounts Payable $325,000
- Receivables 460,000Common Stock 700,000
- Inventory 275,000 Retained Earnings 837,000
- Plant Assets (Net)1,025,000
Total Assets 1,862,500 Total Equities$1,962,500
An appraisal indicated thatthe fair market value of the inventory was $375,000 and that the fair market value of the plant assets was$1,225,000. The agreed purchase price was $2,350,000, and this amount was paid in cash kto the previous owners of the Bell Company.prepare the entry for the Edge Company to record the purchase.