Question
On January 1, 2021, Consolidated Company purchased 100% of the common stock Avergy Industries for $720,000. On that date, Avergy had common stock of $100,000
On January 1, 2021, Consolidated Company purchased 100% of the common stock Avergy Industries for $720,000. On that date, Avergy had common stock of $100,000 and retained earnings of $420,000. Equipment and land were each undervalued by $50,000 on Avergy's books. There was a $40,000 overvaluation of Bonds Payable, as well a $60,000 undervaluation of inventory. The combined consolidation entries necessary for a date of acquisition balance sheet include all of the following, except:
A. Equity investment credit 720,000
B. Retained earnings credit 420,000
C. No debits or credits to goodwill
D. Common stock debit 100,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started