Question
On October 1, 20x3, separate statements of GOLDIE Co. and BATA Co. appear below: GOLDIEBATACash59,7007,500Accounts receivable136,00023,900Inventories57,3009,250Plant and equipment286,30013,600TOTAL539,30054,250Liabilities123,80011,900Capital stock100,00010,000Additional paid in capital25,000-Retained earnings290,50032,350TOTAL539,30054,250 GOLDIE Co.
On October 1, 20x3, separate statements of GOLDIE Co. and BATA Co. appear below:
GOLDIEBATACash59,7007,500Accounts receivable136,00023,900Inventories57,3009,250Plant and equipment286,30013,600TOTAL539,30054,250Liabilities123,80011,900Capital stock100,00010,000Additional paid in capital25,000-Retained earnings290,50032,350TOTAL539,30054,250
GOLDIE Co. acquired an 80% interest in BATA Co. On the acquisition date, October 1, 20x3, the fair market values of Bata Co's assets were properly reflected in its accounts.P40,000was paid for this acquisition.
Question:In the preparation of a consolidated balance sheet, the elimination entry as to goodwill in the consolidated working paper will be:
Group of answer choices
A charge to Investment account by 3,178
A credit to Investment account by 6,120
A credit to Investment account by 7,650
A credit to Plant and Equipment account by 6,120
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
