Question: Patel Company issued 95 000 shares of 1 par value common

Patel Company issued 95,000 shares of $1 par value common stock (market value of $6 share) for 95% of the common stock of Seely Company on January 1, 2011. Seely Company had the following assets, liabilities, and owners’ equity at that time:

A. Prepare the stock acquisition entry on the books of Patel Company, taking into account tax effects. Assume an income tax rate of 40%.
B. Prepare eliminating entries for the preparation of a consolidated balance sheet work-paper on January 1,2011.

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  • CreatedMarch 13, 2015
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