Prepare the eliminating-adjusting entries

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Question - On January 1, 2019, Plymouth Corporation purchased an 80% interest in Salem Company for $800,000. A summary of Salem's balance sheet on that date revealed the following:

 

Book Value

Fair Value

Receivables

$100,000

$100,000

Inventory

350,000

370,000

Equipment

500,000

650,000

Land

250,000

330,000

 

$1,200,000

$1,450,000

Liabilities

$300,000

 

Common stock

500,000

 

Retained earnings

400,000

 

 

$1,200,000

 

The equipment had an original life of 20 years and has a remaining useful life of 10 years.

Required -

A. Calculate the difference between implied and book value solve in Microsoft word please.

B. Determine the allocation of the difference between implied and book value solve in Microsoft word please.

C. For the January 1, 2019, Prepare the eliminating/adjusting entries needed on the consolidated workpaper solve in Microsoft word please.

Reference no: EM132570496

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