1. Finn Company purchases all of the common stock of Murray Company for $375,000 when Murray Company has $150,000 of common stock and $225,000 of retained earnings. If a consolidated balance sheet is prepared immediately after the acquisition, what amounts are eliminated in consolidation? Explain.

2. Bradshaw Company owns 100% of Dee Company. At year-end, Dee owes Bradshaw $150,000 arising from a loan made during the year. If a consolidated balance sheet is prepared at year-end, how is the $150,000 handled? Explain.