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1) Calerway Corporation purchased 100% of the common stock of Asebrook Corporation on 1/1/2019by issuing bonds with a fair value of $1,000,000.On that date, Asebrook

1) Calerway Corporation purchased 100% of the common stock of Asebrook Corporation on 1/1/2019by issuing bonds with a fair value of $1,000,000.On that date, Asebrook reported net assets with a book value of$920,000 (common stock of $600,000 and retained earnings of $320,.000)The amount paid in excess of the book value was attributed to the increased value ofa building held by Asebrook with a remaining useful life of twenty years.Asebrook reported$42,000 in income and $20,000 in dividends in 2019 and$60,000 in the year ended 12/31/2020 and paid no dividends.Assuming that Calerway Corporation uses the equity method in accounting for its investmentin Asebrook Corporation, prepare all the consolidation worksheetelimination and reclassificationentries for2019

2)Ellis Corporation purchased 100% of the common stock of Rain Corporation on 1/1/2019.by paying cash of $1,200,000.On that date, Rain reported net assets with a book value of $1,050,000(common stock of $1,000,000 and retained earnings of $50,000)The amount paid in excess of the book value was attributed to the increased value ofa building held by Rain with a remaining useful life of ten years.Rain reportednet income of $86,000 and paid dividends of $12,000 in 2019.Rain reported net income of$60,000 in the year ended 12/31/2020 and paid no dividends.Assuming that Ellis Corporation uses the equity method in accounting for its investmentin Rain Corporation,compute the differentialand prepare the all Ellis'sjournal entriesrelated to Rain for theyear2019,(including the acquisition entry)

1,200,000 - 1,050,000= 150,000

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