On December 31, 2011, Purple Corp. purchased 80% of the outstanding common stock of sand company for 20,000,000 Sand company's balance sheet at the time of acquisition is provided below

prepare the elimination entries necessary to complete the consolidated financial statement work paper

Hint: prepare the CAD first. the Cad has been partially completed above

Part 3 Prepare the Income Statement, Statement of Retained Earnings, and Balance Sheet.

Part II On December 31, 2011, Purple Corp. purchased 80% of the outstanding common stock of Sand Company for: LS 20,000,000 Sand Company's balance sheet at the time of acquisition is provided below Fair value Difference Balance Sheet 12/3 1/2011 12/31/2011 BV vs. Ev Cash 250,000 250,000 1,500,000 1,500,000 Account Receivable I 7,000,000 4,000,000 (3,000,000) Inventory I 14,000,000 $14,000,000 Plant and Equipment Building HQ I 2,000,000 2,000,000 2,250,000 2.000.000 $24,000,000 (1,000,000) Total Assets 25,000,000 Liabilities 4,500,000 4,500,000 6,500,000 Mortgage 6,500,000 S 3,500,000 Ls 3,000,000 L500,000 Long-term debt 14,500,000 $14,000,000 Common Stock, $1 par value 150,000 APIC 3,400,000 RE 8,100,000 Sub Total I 11,650,000 I s 1.150,000 Treasury Shares (3,000 shares) Total Equity 10,500,000 Toal Liabilities and Equity 25,000,000 Based on the above data, prepare the elimination entries necessary to complete the consolidated financial statement workpaper. Instructor Hint: Prepare the CAD first. The CAD has been partially completed below Percentage Puchased: Parent Negl Tot al Implied Fair value Given Up I 5,000,000 25,000,000 20,000,000 I 8,400,000 s 2,100,000 10,500,000 Book Value Received Difference 11,600,000 S2,900,000 14,500,000