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(Solved) (Latest ver. Aug 2020) - Moss Interiors: Accounting for Goodwill

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Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel Gallaries. The balance sheet of Zweifel is given in an abbreviated form below.

Zweifel Galleries
Balance Sheet
As of Dec. 31, 2008

Cash - $100,000
Land - 70,000
Building (net) - 200,000
Equipment (net) - 175,000
Copyright (net) - 30,000
Total assets - $575,000

Accounts Payabe - $50,000
Long-term notes payable - 300,000
total liabilities - 350,000
Common stock - $200,000
Retained Earnings - 25,000 - 225,000
Total liabilities and stockholders' equity - $575,000

Moss and Zweifel agree that:
1. Land is undervalued by $30,000
2. Equipment is overvalued by $5,000

Zweifel agrees to sell the gallery to Moss for $350,000.

Prepare the entry to record the purchase of Zweifel Galleries on Moss's books. Thank you


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