On June 30, 2015, Streeter Company reported the following account balances: Receivables $ 83,900 Current liabilities $ (12,900 ) Inventory 70,250 Long-term liabilities (54,250 ) Buildings (net) 78,900 Common stock (90,000 ) Equipment (net) 24,100 Retained earnings (100,000 )Total liabilities and equities $ (257,150 )On June 30, 2015, Princeton paid $310,800 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $15,100 in legal fees. Princeton also agreed to pay $55,600 to the former owners of Streeter contingent on meeting certain revenue goals during 2016. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $17,900.In determining its offer, Princeton noted the following pertaining to Streeter:• It holds a building with a fair value $43,100 more than its book value.• It has developed a customer list appraised at $25,200, although it is not recorded in its financial records.• It has research and development activity in process with an appraised fair value of $36,400. However, the project has not yet reached technological feasibility and the assets used in the activity have no alternative future use.• Book values for the receivables, inventory, equipment, and liabilities approximate fair values. Prepare Princeton’s accounting entry to record the combination with Streeter.Prepare the following journal entries:Record the acquisition of Streeter company.Record the legal fees related to the combination.
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