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Question 4: (10 points) A1, B1, C1, C3 On September 30, 2017, AL Manama Corporation paid $550,000 to acquire 72% of the outstanding common stock

Question 4: (10 points) A1, B1, C1, C3

On September 30, 2017, AL Manama Corporation paid $550,000 to acquire 72% of the outstanding common stock of Ahlia Company which became a subsidiary. Differences between current fair values and carrying amounts of identifiable net assets of Ahlia Company on September 30, 2017, were limited to the following:

Current Fair Values

Carrying Amounts

Inventories

$ 5,000

$ 20,000

building (net)

260,000

140,000

Instructions:

  1. Prepare the journal entry to record the investment on September 30, 2017 (4 marks)

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