Prepare the working paper eliminating entries necessary

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On December 31, 2009, Adams corporation acquired all of the stock of Baker company. the fair value of Adam's shares used in the exchange was $7,500,000. At the time of acquisition, the book value of Baker's stockholder's equity was $5000,000, and the fair value of baker's building (25-year life) exceeded its book value by $1000,000. from the date of acquisition to December 31, 2015, Baker had cumulative net income of $1,300,000 and declared and paid total dividends of $400,000. for 2016, Baker reported net income of $300,000 and declared and paid cash dividends of $100,000. Adams uses the complete equity method to account for its investment in Baker. There is no goodwill impairment loss for the period 2010 through 2015, but there is impairment loss of $100,000 in 2016.

required

Prepare the working paper eliminating entries necessary to consolidate the financial statements of Adams and Baker at December 31,2016.

Reference no: EM131305945

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