On June 10, 20X8, Game Corporation acquired 60 percent of Amber Companys common stock. The...
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Accounting
On June 10, 20X8, Game Corporation acquired 60 percent of Amber Companys common stock. The fair value of the noncontrolling interest was $30,400 on that date. Summarized balance sheet data for the two companies immediately after the stock purchase are as follows:
On June 10, 20X8, Game Corporation acquired 60 percent of
Item private corp secret company
book value book value fair value
Cash 26800 7000 7000
Account receivable 37000 12000 12000
Inventory 85000 22000 27000
Building and equipment 121000 54000 74000
Investment in secret company45600
Total 315400 95000 120000
Account payable 21000 3000 3000
Bonds payable 166400 41000 41000
common stock 54000 17000
retained earnings 74000 34000
total 315400 95000 44000
Required
a. Give the elimination entries required to prepare a consolidated balance sheet immediately after the purchase of Amber Company shares.
b. Explain how elimination entries differ from other types of journal entries recorded in the normal course of business.
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