Sonic Manufacturing Company purchased 100 percent of the common stock of Pool Manufacturing Company for $600,000. Pools

Question:

Sonic Manufacturing Company purchased 100 percent of the common stock of Pool Manufacturing Company for $600,000. Pool’s stockholders’ equity included common stock of $400,000 and retained earnings of $200,000. Prepare the eliminating journal entry that would appear on the work sheet for consolidating the balance sheets of these two entities as of the acquisition date.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...