2. Alpha acquires 100% of Stone for $400 in cash, the fair value of the net assets of Stone is 370, the Capital stock and Retained earnings for Stone is 200 and 160 respectively and the BV value for the inventory is 60 while the FV is 70, then Alpha elimination worksheet entry is

   1. Capital stock debit 200, Retained earnings debit 160, goodwill debit 30, inventory credit 10 and Investment in stone credit 400.

   2. Capital stock debit 200, Retained earnings debit 160, Goodwill debit 40, and Investment in stone credit 400.

   3. None of the other answers.

   4. Capital stock debit 200, Retained earnings debit 160, Goodwill debit 30, Inventory debit 10 and Investment in stone credit 400.