Reed Corporation acquired 100 percent of Thorne Corporations voting common stock on December 31, 20X4, for $395,000.

Question:

Reed Corporation acquired 100 percent of Thorne Corporationâ€™s voting common stock on December 31, 20X4, for $395,000. At the date of combination, Thorne reported the following:

At December 31, 20X4, the book values of Thorneâ€™s net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $20,000 less than book value, and inventories, which had a fair value $36,000 more than book value.

Required
Reed Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Give the elimination entry or entries needed to prepare a consolidated balance sheet at December 31,20X4.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...