Question

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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  • CreatedMay 23, 2014
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