Prepare the basic elimination entry at December

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Question - On January 1, 2013, Pepper Corporation acquired 80 percent of Salt Company's voting common stock for $800,000. At the time of the combination, Salt reported common stock outstanding of $500,000 and retained earnings of $175,000, and the fair value of the noncontrolling interest was $200,000. The book value of Salt's net assets approximated market value except for limited-life patents that had a market value of $80,000 more than their book value, equipment had $50,000 more than book value and Inventory had $30,000 more than book value. The patents and equipment had a remaining economic life of 4 years and 5 years, respectively, at the date of the business combination. Salt reported net income of $150,000 and paid dividends of $20,000 during 2013. Salt's Accumulated Depreciation at the time of acquisition was $70K and Pepper's was 80K. Depreciation Expense in 2013 for Salt was $20K.

Required - Prepare the basic elimination entry at December 31, 2013?

Reference no: EM132862272

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