Pattern Company purchased 100% of Stock Company on January 2, 2013, for $450,000. At the time, Stocks capital stock was $300,000, and its retained earnings were $150,000. At the time, Pattern and Stock had no intercompany transactions. Any excess of value implied by the purchase price over book value is attributable to land.

A. Prepare the journal entry to record Patterns investment in Stock.

B. Prepare the entry to eliminate Patterns investment in Stock.

C. Complete the workpaper.

Pattern Company and Stock Company Workpaper January 2, 2013
	Pattern Company	Stock Company	Eliminations		Cons. Bal. Sheet
			Debit	Credit
Assets
Cash	$ 200,000	$ 50,000
Accts Receivable	75,000	25,000
Inventory	80,000	50,000
Investment in S	450,000
Plant & Equip. (Net)	500,000	350,000
Land	100,000	50,000
Total Assets	$1,405,000	$525,000
Liabilities & Equity
Accounts Payable	$ 150,000	$ 75,000
Capital Stock	1,000,000	300,000
Retained Earnings	255,000	150,000
Total Lia. & Eq.	$1,405,000	$525,000