Capitol Company decided to sell one of its subsidiaries,Subsidiary ABC.BiRite Inc,is the purchaser of this subsidiary.The selling price for Subsidiary ABC is $2,000,000.BiRite performed a valuation analysis of Subsidiary's ABC assets acquired and liabilities.The following table presents book values from Subsidiary ABC financial statements and fair values determined by BiRite:
a.Prepare the journal entry made by BiRite to record the acquisition of Subsidiary ABC.
b.Describe how the journal entry would be different if the acquisition prices was $1 million.

Question

Capitol Company decided to sell one of its subsidiaries,Subsidiary ABC.BiRite Inc,is the purchaser of this subsidiary.The selling price for Subsidiary ABC is $2,000,000.BiRite performed a valuation analysis of Subsidiary's ABC assets acquired and liabilities.The following table presents book values from Subsidiary ABC financial statements and fair values determined by BiRite:
  a.Prepare the journal entry made by BiRite to record the acquisition of Subsidiary ABC.
b.Describe how the journal entry would be different if the acquisition prices was $1 million.

Quizplus · Accepted Answer

The Answer of Capitol Company decided to sell one of its subsidiaries,Subsidiary ABC.BiRite Inc,is the purchaser of this subsidiary.The selling price for Subsidiary ABC is $2,000,000.BiRite performed a valuation analysis of Subsidiary's ABC assets acquired and liabilities.The following table presents book values from Subsidiary ABC financial statements and fair values determined by BiRite:
  a.Prepare the journal entry made by BiRite to record the acquisition of Subsidiary ABC.
b.Describe how the journal entry would be different if the acquisition prices was $1 million.

Capitol Company Decided to Sell One of Its Subsidiaries,Subsidiary ABC