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Prepare elimination entries for stock acquisition

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Reference no: EM13705741

Assume that Big Company decides to acquire 100% Little Company for $500,000. Prepare the appropriate journal entries.

Use the equity method being this is a controlled acquisition.

1. Perform the journal entries asked.

2. Complete the consolidated worksheet.

3. Prepare the consolidated balance sheet in good form.

Prepare the journal entries for a 100% Asset Acquisition (using Cash)

Account  DR CR
Cash  $      35,000  
AR  $      10,000  
Inventory  $      65,000  
Land  $      40,000  
PP&E  $   400,000  
Patent  $               -    
Goodwill  $      50,000  
     AP    $   100,000
     Cash    $   500,000

Which accounting method is most appropriate for representing an investment of this type?Prepare the journal entries for a 100% Asset Acquisition (using Big Company Cash)

Prepare the journal entries for a 100% Acquisition by issuing 10,000 shares of Big Company Stock

Account  DR CR
Investment in Little Company $500,000  
     Cash   $500,000

Prepare Elimination Entries for Stock Acquisition

Reference no: EM13705741

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