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Category > Accounting Posted 07 May 2017 My Price 8.00

Assume that Big Company decides to acquire 100% Little Company

Assume that Big Company decides to acquire 100% Little Company for $500,000, prepare Elimination Entries for Stock Acquisition.

Big Company Balance Sheet
Assets, Liabilities & Equities Book Value
Cash $2,100,000
AR $10,000
Inventory $200,000
Land $40,000
PP&E $400,000
Accumulated Depreciation -$150,000
Patent $0
    Total Assets $2,600,000
AP $100,000
Common Stock ($10 par) $450,000
Additional Paid In Capital $600,000
Retained Earnings $1,450,000
    Total Liabilities & Equity $2,600,000
Little Company Balance Sheet
Assets, Liabilities & Equities Book Value
Cash $35,000
AR $10,000
Inventory $65,000
Land $40,000
PP&E $400,000
Accumulated Depreciation -$150,000
Patent $0
    Total Assets $400,000
AP $100,000
Common Stock $100,000
Additional Paid In Capital $50,000
Retained Earnings $150,000
    Total Liabilities & Equity $400,000
   
Assume that Book Value = Fair Value

Answers

Alpha Geek
(8)
Status NEW Posted 07 May 2017 11:05 AM My Price 8.00

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file 1494155411-Answer.docx preview (137 words )
A-----------ssu-----------me -----------tha-----------t B-----------ig -----------Com-----------pan-----------y d-----------eci-----------des----------- to----------- ac-----------qui-----------re -----------100-----------% L-----------itt-----------le -----------Com-----------pan-----------y f-----------or -----------$50-----------0,0-----------00,----------- pr-----------epa-----------re -----------Eli-----------min-----------ati-----------on -----------Ent-----------rie-----------s f-----------or -----------Sto-----------ck -----------Acq-----------uis-----------iti-----------on.----------- B-----------ig -----------Com-----------pan-----------y B-----------ala-----------nce----------- Sh-----------eet----------- A-----------sse-----------ts,----------- Li-----------abi-----------lit-----------ies----------- &a-----------mp;-----------amp-----------; E-----------qui-----------tie-----------s B-----------ook----------- Va-----------lue----------- C-----------ash----------- $2-----------,10-----------0,0-----------00 ----------- AR----------- $1-----------0,0-----------00 ----------- In-----------ven-----------tor-----------y $-----------200-----------,00-----------0 -----------Lan-----------d $-----------40,-----------000----------- P-----------P&a-----------mp;-----------amp-----------;E -----------$40-----------0,0-----------00 ----------- Ac-----------cum-----------ula-----------ted----------- De-----------pre-----------cia-----------tio-----------n ------------$15-----------0,0-----------00 ----------- Pa-----------ten-----------t $-----------0 ----------- Â----------- Â ----------- To-----------tal----------- As-----------set-----------s $-----------2,6-----------00,-----------000----------- A-----------P $-----------100-----------,00-----------0 -----------Com-----------mon----------- St-----------ock----------- ($-----------10 -----------par-----------) $-----------450-----------,00-----------0 -----------Add-----------iti-----------ona-----------l P-----------aid-----------
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