Creation of New Subsidiary Lester Company transferred the following assets to a newly created subsidiary, Mumby Corporation, in exchange for 40,000 shares of its $3 par value stock: Cost Book Value Cash $ 40,000 $ 40,000 Accounts Receivable 75,000 68,000 Inventory 50,000 50,000 Land 35,000 35,000 Buildings 160,000 125,000 Equipment 240,000 180,000 Required a. Give the journal entry in which Lester recorded the transfer of assets to Mumby Corporation. b. Give the journal entry in which Mumby recorded the receipt of assets and issuance of common stock to Lester.

Creation of New Subsidiary Lester Company transferred the following assets to a newly created subsidiary, Mumby Corporation, in exchange for 40,000 shares of its $3 par value stock: Cost Book Value...

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Creation of New Subsidiary

Lester Company transferred the following assets to a newly created subsidiary, Mumby Corporation, in exchange for 40,000 shares of its $3 par value stock:

	Cost	Book Value
Cash	$ 40,000	$ 40,000
Accounts Receivable	75,000	68,000
Inventory	50,000	50,000
Land	35,000	35,000
Buildings	160,000	125,000
Equipment	240,000	180,000

Required

a. Give the journal entry in which Lester recorded the transfer of assets to Mumby Corporation.

b. Give the journal entry in which Mumby recorded the receipt of assets and issuance of common stock to Lester.

Answered Same Day Dec 24, 2021

Solution

Robert answered on Dec 24 2021

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Creation of New Subsidiary Lester Company transferred the following assets to a newly created subsidiary, Mumby Corporation, in exchange for 40,000 shares of its $3 par value stock: Cost Book Value...

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