1. Which of the following intercompany transactions must be eliminated in the preparation of consolidated financial statements?

Sales revenue and cost of goods sold only

Receivables and payables only

Revenues, expenses, gains and losses only

All revenues, expenses, gains, losses, receivables and payables

2.

Bell Co. 75% of the outstanding stock of Maxon Corporation in a business combination. The book values of Maxon's net assets are equal to the fair values except for a warehouse which has a net book value and fair value of $420,000 and $700,000, respectively. At what value would the warehouse be reported on the consolidated balance sheet?

$315,000

$420,000

$525,000

$700,000