5.Sewell purchased 80% of the voting stock of Snicker for $425,000. At the date of acquisition, Snicker’s equity accounts were as follows: Common Stock – $615,000; Other Contributed Capital – $120,000 and Retained Earnings – $25,000.At the date of acquisition, all fair values of Snicker’s net assets equal their book value except for Land.Snicker’s fair value of Land is $25,000 greater than the book value.
Prepare in general journal form the workpaper entries to eliminate Powell’s investment in Snicker Company in the preparation of a consolidated workpaper at the date of acquisition.
Include a computation and allocation schedule, which will be helpful in order to prepare the eliminating entries correctly.
At Acquisition Pro forma Journal EntriesAccount Ledger Debit Common Stock SCE $ 615 000.00 Other Contributed Capital SCE $ 120 000.00 Retained Earnings SCE $ 25 000.00 Land – revaluation SCE $…
