Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

- on January 1, 2015 Company A acquired 75% of the voting common stock of company B for $1, 500, 000 cash. Company B realized

- on January 1, 2015 Company A acquired 75% of the voting common stock of company B for $1, 500, 000 cash.

Company B realized net income of $ 200,000 for year 2015

beginning balance in retained earnings of company B was 500,000

company B had common stocks of 50.000 shares ($ 5 par value per share, trading price $30) at the date of acquisition.

company B declared dividends of $ 100,000 for year 2015

Required: Prepare basic elimination entry to prepare consolidated financial statements assuming the parent company used equity method and no differential (acquisition price equal net book value of the assets of the acquired company)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Salvation Audit

Authors: Colin Grant

74th Edition

094086634X, 978-0940866348

More Books

Students also viewed these Accounting questions

Question

1. Define and explain culture and its impact on your communication

Answered: 1 week ago