Refer to the balance sheets of Plate and Salad in P16-13. Assume that Plate buys 80% of Salad’s common stock for \($180,000\) cash. The fair value of Salad’s land is \($20,000\), the fair value of Salad’s buildings and equipment is \($110,000\) and all other fair values equal book values.
Required:
Give answers to the following under

(a) purchase method and

(b) acquisition method.
1. Give the journal entry on Plate’s books to record the acquisition of Salad.
2. Prepare the elimination entries needed to prepare a consolidated balance sheet immediately after the acquisition.
3. Prepare the consolidated balance sheet immediately after the acquisition.