כ Pool Company purchased 90% of the outstanding common stock of Spruce Company on December 31, 2014, for cash. At that time the balance sheet of Spruce Company was as follows:Current assets $1,114,600, Plant and equipment 941,380Land 177,130Total assets $2,233,110Liabilities $827,740Common stock, $20 par value 867,000Other contributedcapital 468,300 Retained earnings 174,370Total 2,337,410Less treasury stock at cost, 5,215 shares 104,300Total equities $2,233,110(a) Prepare the elimination entry required for the preparation of a consolidated balance sheet work-paper on December 31, 2014, assuming the purchase price of the stock was $1,537,800. Assume that any difference between the book value of net assets and the value implied by the purchase price relates to subsidiary land. (Round answers to 0 decimal places, e.g. 125.)

כ Pool Company purchased 90% of the outstanding common stock of Spruce Company on December 31, 2014, for cash. At that time the balance sheet of Spruce Company was as follows:Current assets $1,114,600, Plant and equipment 941,380Land 177,130Total assets $2,233,110Liabilities $827,740Common stock, $20 par value 867,000Other contributedcapital 468,300 Retained earnings 174,370Total 2,337,410Less treasury stock at cost, 5,215 shares 104,300Total equities $2,233,110(a) Prepare the elimination entry required for the preparation of a consolidated balance sheet work-paper on December 31, 2014, assuming the purchase price of the stock was $1,537,800. Assume that any difference between the book value of net assets and the value implied by the purchase price relates to subsidiary land. (Round answers to 0 decimal places, e.g. 125.)

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 55RSCQ

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