On January 1, 2025, Henderson Company purchased 100% of the common stock of Caramel Company for $590,000 cash. Fair values differed from book values as follows: Fair value Land 100,000 Patent 250,000 Bonds Payable 105,000 The trial balances of the companies at the acquisition date are as follows: Trial Balance Account Titles Henderson Caramel Cash 650,000 65,000 Land 120,000 30,000 Buildings, net 250,000 180,000 Goodwill 400,000 200,000 Current Liabilities 170,000 75,000 Bonds Payable 500,000 100,000 Common Stock 70,000 30,000 APIC 350,000 70,000 Retained Earnings 330,000 200,000 Which of the following is not one of the eliminations and adjustments included on the consolidation worksheet at the acquisition date? Question 9Answer a. Debit to Common Stock for $30,000 b. Credit to Goodwill for $200,000 c. Credit to Investment in Sub for $590,000 d. Debit to Land for $100,000
On January 1, 2025, Henderson Company purchased 100% of the common stock of Caramel Company for $590,000 cash. Fair values differed from book values as follows:
Fair value
Land 100,000
Patent 250,000
Bonds Payable 105,000
The trial balances of the companies at the acquisition date are as follows:
|
|
||
|
Account Titles |
Henderson |
Caramel |
|
Cash |
650,000 |
65,000 |
|
Land |
120,000 |
30,000 |
|
Buildings, net |
250,000 |
180,000 |
|
|
400,000 |
200,000 |
|
Current Liabilities |
170,000 |
75,000 |
|
Bonds Payable |
500,000 |
100,000 |
|
Common Stock |
70,000 |
30,000 |
|
APIC |
350,000 |
70,000 |
|
|
330,000 |
200,000 |
Which of the following is not one of the eliminations and adjustments included on the consolidation worksheet at the acquisition date?
Question 9Answer
a.
Debit to Common Stock for $30,000
b.
Credit to Goodwill for $200,000
c.
Credit to Investment in Sub for $590,000
d.
Debit to Land for $100,000
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
