Cinema Company acquired 70 percent of Movie Corporation's shares on December 31,20X5,at underlying book value of $98,000.At that date,the fair value of the noncontrolling interest was equal to 30 percent of the book value of Movie Corporation.Movie's balance sheet on January 1,20X8,contained the following balances:
On January 1,20X8,Movie acquired 5,000 of its own $2 par value common shares from Nonaffiliated Corporation for $6 per share.

-Based on the preceding information,the eliminating entry needed in preparing a consolidated balance sheet immediately following the acquisition of shares will include:

Question

Cinema Company acquired 70 percent of Movie Corporation's shares on December 31,20X5,at underlying book value of $98,000.At that date,the fair value of the noncontrolling interest was equal to 30 percent of the book value of Movie Corporation.Movie's balance sheet on January 1,20X8,contained the following balances:
On January 1,20X8,Movie acquired 5,000 of its own $2 par value common shares from Nonaffiliated Corporation for $6 per share.
 
-Based on the preceding information,the eliminating entry needed in preparing a consolidated balance sheet immediately following the acquisition of shares will include:

Quizplus · Accepted Answer

The eliminating entry for a consolidated balance sheet after acquiring shares typically involves recognizing the non-controlling interest (NCI) in the net assets (NA) of the acquired company, which is reflected as a credit.

Cinema Company Acquired 70 Percent of Movie Corporation's Shares on December