Acc407 Advanced Accounting: P2-14 The following book and fair values were available for Westmont Company

Acc407 Advanced Accounting P2-14 The following book and fair values were available for Westmont Company as of March 1. Book Value Fair Value Inventory 630,000 600,000 Land 750,000 990,000 Buildings 1,700,000 2,000,000 Customer relationships – 800,000 Accounts Payable (80,000) (80,000) Common stock (2,000,000) Additional paid-in capital (500,000) Retained earnings 1/1 (360,000) Revenues (420,000) Expenses 280,000 Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $25,000 and Arturo pays $42,000 for legal fees to compete the transaction. Prepare Arturo’s journal entry to record its acquisition of Westmont.