Question
Essex Inc acquired BB Inc on 1/1/20 for $1,000,000. The equity accounts of BB at this date were: Common Stock $150,000; Retained Earnings $750,000. All
Essex Inc acquired BB Inc on 1/1/20 for $1,000,000. The equity accounts of BB at this date were: Common Stock $150,000; Retained Earnings $750,000. All assets and liabilities at this date had book values approximately equal to fmv. Assuming Essex wished to produce a consolidated b/s on 1/1, what would the consolidation (basic elimination) entry be?
- Dr Common Stock $150,000
Dr Retained Earnings $750,000
Dr Goodwill $100,000
Cr Investment in Sub $1,000,000
2. Dr Investment in Sub $1,000,000
Cr Common Stock $150,000
Cr Retained Earnings $750,000
Cr Goodwill $100,000
3. Dr Common Stock $150,000
Dr Retained Earnings $750,000
Cr Investment in Sub $900,000
4. Dr Common Stock $150,000
Dr Retained Earnings $750,000
Cr Investment in Sub $1,000,000
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