Assume that on December 31 Shearson Financial Consultants, a 100 -percent-owned subsidiary of American Express Company, had the following owners' equity:

Assume further that American Express's cost of its investment in Shearson was \(\$ 6,100,000\) and that Shearson owed American Express \(\$ 319,000\) on a note.
\section*{Required}
Give the work sheet entry in general journal form to eliminate

(a) the investment of American Express and the stockholders' equity of Shearson and

(b) the note receivable of American Express and note payable of Shearson.

Transcribed Image Text:

Common Stock.......... Retained Earnings... $2,000,000 4,100,000