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A parent company acquires all of the outstanding common stock of its subsidiary for a cash purchase price of $265,000. On the acquisition date, the subsidiary reported $60,000 for Common Stock and $45,000 for Retained Earnings. An examination of the subsidiary's Balance Sheet revealed that book values were equal for fair values for all asset, except for an unrecorded patent, which the parent values at $95,000.

1) Prepare the entry that the parent makes to record the investment.

2) Prepare the (E) Elimination and (A) Acquisition Accounting Premium Consolidation entries.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91978545

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