Clayton Corporation purchased 75 percent of Topple Corporation common stock and 40 percent of its preferred stock

Question:

Clayton Corporation purchased 75 percent of Topple Corporation common stock and 40 percent of its preferred stock on January 1, 20X6, for $270,000 and $80,000, respectively. At the time of purchase, the fair value of the common shares of Topple held by the noncontrolling interest was $90,000. Topple’s balance sheet contained the following balances:

Preferred Stock ($10 par value) .... $200,000

Common Stock ($5 par value)..... 150,000

Retained Earnings........... 210,000

Total Stockholders’ Equity...... $560,000

Required

Give the elimination entries needed to prepare a consolidated balance sheet immediately after Clayton purchased the Topple shares.

Common Stock
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