Paco Company acquired 100 percent of the stock of Garland Corp.on December 31,20X8.The stockholder's equity section of Garland's balance sheet at that date is as follows:
Paco financed the acquisition by using $880,000 cash and giving a note payable for $400,000.Book value approximated fair value for all of Garland's assets and liabilities except for buildings which had a fair value $60,000 more than its book value and a remaining useful life of 10 years.Any remaining differential was related to goodwill.Paco has an account payable to Garland in the amount of $30,000.
Required:
1)Present all eliminating entries needed to prepare a consolidated balance sheet immediately following the acquisition.
2)What additional eliminating entry must be prepared at December 31,20X9?

Question

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The Answer of Paco Company acquired 100 percent of the stock of Garland Corp.on December 31,20X8.The stockholder's equity section of Garland's balance sheet at that date is as follows:
Paco financed the acquisition by using $880,000 cash and giving a note payable for $400,000.Book value approximated fair value for all of Garland's assets and liabilities except for buildings which had a fair value $60,000 more than its book value and a remaining useful life of 10 years.Any remaining differential was related to goodwill.Paco has an account payable to Garland in the amount of $30,000.
Required:
1)Present all eliminating entries needed to prepare a consolidated balance sheet immediately following the acquisition.
2)What additional eliminating entry must be prepared at December 31,20X9?

Paco Company Acquired 100 Percent of the Stock of Garland