Consolidation entries, Prepare the entry on McClellan's

Consolidation entries

Assignment Help Financial Accounting

Reference no: EM13920207

McClellan, Inc. acquires all of the outstanding common stock of Cranston Enterprises for $150,000 cash. On the acquisition date, the subsidiary had Common Stock of $30,000 and Retained Earnings of $30,000. A patent unrecorded by Cranston was valued at $60,000.

Required:

a. Prepare the entry on McClellan's books to record the purchase.

b. Prepare all necessary consolidation entries.

Reference no: EM13920207

Questions Cloud

Uses the proceeds to repurchase shares : Bruce & Co expects its EBIT to be $185,000 every year, forever. The firm can borrow at 9%. Bruce currently has no debt and its cost of equity is 16%. The tax rate is 35%. What is the value of the firm? What is the value of the firm if Bruce decides t..

Market values except for inventory : McCoy's assets and liabilities had book values equal to market values except for inventory, land and building which were undervalued by $30,000, $20,000, and $25,000, respectively.

What amount of cash will the creditors receive : Explain the primary differences between investors and creditors.

Firm is considering two manually exclusive projects : Suppose a firm is considering two manually exclusive projects. One has a life of 6 years and the other a life of 10 years. Would the failure to employ some type of replacement chain analysis bias an NPV analysis against one of the projects? Explain

Consolidation entries : Prepare the entry on McClellan's books to record the purchase.Prepare all necessary consolidation entries.

Two firms are considering borrowing : Two firms are considering borrowing. One firm has very good prospects in terms of future projects and is in an area in which cash flows are volatile and future needs are difficult to assess. The other firm has more stable cash flows and fewer project..

Earnings before interest and taxes : There are two firms in the same business: Air Wolf and Red Wolf. Both are in the same risk class and each has an EBIT (Earnings Before Interest & Taxes) of $10 million. Air Wolf has no debt and Red Wolf has $4 million of debt. The cost of equity is 8..

Fundamental role that prisons and jails play : All societies in the world acknowledge the fundamental role that prisons and jails play in ensuring that law breakers receive the punishment they deserve.

Purpose of the light reactions in photosynthesis : What is the overall purpose of the light reactions in photosynthesis? Why are carnivores, such as lions, dependent on photosynthesis to survive?

User Account

All Pages