Help Please Accounting HW! On January 1, 2X13, Ingrad Company acquired 100% of t

Question

Help Please Accounting HW!

On January 1, 2X13, Ingrad Company acquired 100% of the outstanding shares of Elltol Company for $50 in cash. During 2X13, Elltol Company had net income of $10, and Ingrad Company had net income of $25. All net income for both companies is in the form of additional cash.

Prepare the following:

a.The journal entry necessary for Ingrad Company on January 1, 2X13.

b.The journal entry necessary for Elltol Company on January 1, 2X13.

c.The consolidated balance sheet immediately after the acquisition.

d.The one elimination entry necessary on December 31, 2X13, assuming none of the income for either company resulted from intercompany sales.

e.The consolidated balance sheet at December 31, 2X13.

Explanation / Answer

Books of Elltol Books of Ingrad Investment in shares A/c Dr. $          50.00 to Cash $          50.00 Cash A/c 10 Cash A/c 25 Net Income A/c 10 Net Income A/c 25 Net Income A/c Dr. 10 Net Income A/c Dr. 25 P&L A/c 10 P&L A/c 25 Consolidated B/S @31/12/13 Elltol Ingrad Cash 40+10 50 Cash =120-50+25 95 Fixed Assets 90 Fixed Assets 130 Investment in shares - Investment in shares 50 Total Assets 140 Total Assets 275 A/P 20 A/P 30 Long term 60 Long term 100 Stockholder equity 50+10 60 Stockholder equity 120+25 145 Total 140 Total 275

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