Which accounting method is most appropriate for representing an investment of this type?

Prepare the journal entries for a 80% Asset Acquisition (using Big Company Cash)

Account

DR

CR

Prepare the journal entries for a 80% Acquisition by issuing 10,000 shares of Big Company Stock

Account

DR

CR

Investment in Little

Common Stock

Additional Paid In Capital

Prepare Elimination Entries for Stock Acquisition

Account

DR

CR

Big Company Balance Sheet (Consolidated)

Assets, Liabilities & Equities

Cash

AR

Inventory

Land

PP&E (net)

Accumulated Depreciation

Goodwill

Patent

Total Assets

AP

Common Stock ($10 par)

Additional Paid In Capital

Retained Earnings

NCI

Total Liabilities & Equity

Big Company Balance Sheet
Assets, Liabilities & Equities	Book Value
Cash	$2,100,000
AR	$10,000
Inventory	$200,000
Land	$40,000
PP&E	$400,000
Accumulated Depreciation	-$150,000
Patent	$0
Total Assets	$2,600,000
AP	$100,000
Common Stock ($10 par)	$450,000
Additional Paid In Capital	$600,000
Retained Earnings	$1,450,000
Total Liabilities & Equity	$2,600,000
Little Company Balance Sheet
Assets, Liabilities & Equities	Book Value
Cash	$35,000
AR	$10,000
Inventory	$65,000
Land	$40,000
PP&E	$400,000
Accumulated Depreciation	-$150,000
Patent	$0
Total Assets	$400,000
AP	$100,000
Common Stock	$100,000
Additional Paid In Capital	$50,000
Retained Earnings	$150,000
Total Liabilities & Equity	$400,000
Assume that Book Value = Fair Value