On January 5, 20X1, Alpha Inc. acquired 80% of the outstanding voting shares of Beta Inc. for $2,000,000 cash. Following are the separate balance sheets for the two companies immediately after the stock purchase, as well as fair value information

On January 5, 20X1, Alpha Inc. acquired 80% of the outstanding voting shares of Beta Inc. for $2,000,000 cash. Following are the separate balance sheets for the two companies immediately after the stock purchase, as well as fair value information regarding Beta Inc.:

Beta Alpha Book Value Fair Value Assets $ 500,000 $ 500,000 Current assets Fixed assets, net $1,750,000 5,000,000 2,000,000 1,625,000 2,000,000 Investment in Beta Total Assets $8,750,000 $2,125,000 $2,500,000 Liabilities Current liabilities $ 250,000 $ 125,000 $ 125,000 Stockholders' Equity Common stock 7,000,000 1,500,000 Capital in excess of par Retained


Required:

1. Prepare the entries for adjustments and eliminations required to prepare the consolidated balance sheet immediately after acquisition under the acquisition method.

2. Prepare the consolidated balance sheet immediately after acquisition.

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Related Book For  answer-question

Financial Reporting And Analysis

ISBN: 9781260247848

8th Edition

Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer

Question Details
Chapter # 17
Section: Exercises
Problem: 14
Posted Date: November 13, 2020 01:49:16