On December 31, 2016, Pinta Company purchased 80% of the outstanding common stock of Snead Company for cash. At the time of acquisition, Snead Company's balance sheet was as follows: Required:
Prepare the elimination entry(s) required for the preparation of a consolidated balance sheet workpaper on December 31, 2016, assuming the purchase price of the stock was $1,670,000. Any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land.

Question

On December 31, 2016, Pinta Company purchased 80% of the outstanding common stock of Snead Company for cash. At the time of acquisition, Snead Company's balance sheet was as follows:  Required:
Prepare the elimination entry(s) required for the preparation of a consolidated balance sheet workpaper on December 31, 2016, assuming the purchase price of the stock was $1,670,000. Any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land.

Quizplus · Accepted Answer

The Answer of On December 31, 2016, Pinta Company purchased 80% of the outstanding common stock of Snead Company for cash. At the time of acquisition, Snead Company's balance sheet was as follows:  Required:
Prepare the elimination entry(s) required for the preparation of a consolidated balance sheet workpaper on December 31, 2016, assuming the purchase price of the stock was $1,670,000. Any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land.

On December 31, 2016, Pinta Company Purchased 80% of the Outstanding