The adjusted, preclosing trial balances of Pie Company and Soup Company on December 31, Year 2, appear below.
Parent Company owns 100 percent of the common stock of Soup Company.It acquired the shares on January 2, Year 1, for an amount equal to the book value of Soup Company's underlying net assets.On December 31, Year 2, Soup Company owes Pie Company $1,100 arising from short-term working capital loans.
Required:
Prepare in journal entry form the elimination entries required on December 31, Year 2, to prepare a consolidated financial statement for Pie Company and Soup Company.Note that neither a formal work sheet nor formal financial statements are required.

Question

The adjusted, preclosing trial balances of Pie Company and Soup Company on December 31, Year 2, appear below.
  Parent Company owns 100 percent of the common stock of Soup Company.It acquired the shares on January 2, Year 1, for an amount equal to the book value of Soup Company's underlying net assets.On December 31, Year 2, Soup Company owes Pie Company $1,100 arising from short-term working capital loans.
Required:
Prepare in journal entry form the elimination entries required on December 31, Year 2, to prepare a consolidated financial statement for Pie Company and Soup Company.Note that neither a formal work sheet nor formal financial statements are required.

Quizplus · Accepted Answer

The Answer of The adjusted, preclosing trial balances of Pie Company and Soup Company on December 31, Year 2, appear below.
  Parent Company owns 100 percent of the common stock of Soup Company.It acquired the shares on January 2, Year 1, for an amount equal to the book value of Soup Company's underlying net assets.On December 31, Year 2, Soup Company owes Pie Company $1,100 arising from short-term working capital loans.
Required:
Prepare in journal entry form the elimination entries required on December 31, Year 2, to prepare a consolidated financial statement for Pie Company and Soup Company.Note that neither a formal work sheet nor formal financial statements are required.

The Adjusted, Preclosing Trial Balances of Pie Company and Soup