Make the journal entry Deloit makes

Assignment Help Accounting Basics

Reference no: EM132691181

Problem - On January 1st 2020 The Deloit and Acme Companies had the following balance sheets:

	Deloit	Acme
Cash	2,000,000	50,000
Accounts receivable	1,000,000	80,000
Inventory	1,000,000	50,000
Equipment	1,000,000	100,000
Accumulated depreciation	500,000	50000
Land	1,000,000	100,000
Total assets	5,500,000	330,000
Accounts payable	1,000,000	40,000
Common stock $1 par	2,000,000	100,000
Common stock	1,000,000	100,000
Retained earnings	1,500,000	90,000

On January 2nd Deloit acquired of 90% the outstanding stock of Acme Company for 500,000 shares of common stock. On January 2nd Deloit stock was selling for $2 per share.

On January 1st the fair market value of Acme's land was $125,000; the fair market value of their inventory was $130,000; the fair market value of the equipment was $30,000; other assets and liabilities had a fair market value equal to book value.

Required -

A) Make the journal entry Deloit makes when it acquires the Acme stock.

B) Make the journal entry Acme makes when its stock is acquired by Deloit.

C) Provide a consolidated balance sheet on Jan 2nd.

D) Make the necessary worksheet entries needed to prepare the consolidated balance sheet.

Reference no: EM132691181

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