Reed Corporation acquired 100 percent of Thorne Corporations voting common stock on December 31, 20X4, for $395,000.

Reed Corporation acquired 100 percent of Thorne Corporation’s voting common stock on December 31, 20X4, for $395,000. At the date of combination, Thorne reported the following:

At December 31, 20X4, the book values of Thorne’s net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $20,000 less than book value, and inventories, which had a fair value $36,000 more than book value.

Required
Reed Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Give the elimination entry or entries needed to prepare a consolidated balance sheet at December 31,20X4.

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Cash Inventory Buildings (net) $ 80,000 200,000 120,000 240,000 $640,000 S120,000 Current Liabilities Common Stock Retained Earnings 100,000 Long-Term Liabilities 420, 000 Total 5640,000 Total