Sheet1Assume that Big Company decides to acquire 80% Little Company for $500,000. Prepare the appropriate journal entries.Big Company Balance Sheet Which accounting method is most appropriate for representing an investment of this type?Prepare Elimination Entries for Stock AcquisitionAssets, Liabilities & EquitiesBook ValueAccount DRCRCash$2,100,000AR$10,000Inventory$200,000Land$40,000PP&E$400,000Accumulated Depreciation-$150,000Patent$0 Total Assets$2,600,000Prepare the journal entries for a 80% Asset Acquisition (using Big Company Cash)AP$100,000Common Stock ($10 par)$450,000Account DRCRAdditional Paid In Capital$600,000Retained Earnings$1,450,000 Total Liabilities & Equity$2,600,000Prepare the journal entries for a 80% Acquisition by issuing 10,000 shares of Big Company StockBig Company Balance Sheet (Consolidated)Little Company Balance SheetAssets, Liabilities & EquitiesAssets, Liabilities & EquitiesBook ValueAccount DRCRCashCash$35,000Investment in LittleARAR$10,000Common StockInventoryInventory$65,000Additional Paid In CapitalLandLand$40,000Allocation of Excess SchedulePP&E (net)PP&E$400,000Accumulated DepreciationAccumulated Depreciation-$150,000GoodwillPatent$0Patent Total Assets$400,000 Total AssetsAP$100,000APCommon Stock$100,000Common Stock ($10 par)Additional Paid In Capital$50,000Additional Paid In CapitalRetained Earnings$150,000Retained Earnings Total Liabilities & Equity$400,000NCI Total Liabilities & EquityAssume that Book Value = Fair Value
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Sheet1Assume that Big Company decides to acquire 80 Little Compan.docx
1. Sheet1Assume that Big Company decides to acquire 80% Little
Company for $500,000. Prepare the appropriate journal
entries.Big Company Balance Sheet Which accounting method
is most appropriate for representing an investment of this
type?Prepare Elimination Entries for Stock AcquisitionAssets,
Liabilities & EquitiesBook ValueAccount
DRCRCash$2,100,000AR$10,000Inventory$200,000Land$40,00
0PP&E$400,000Accumulated Depreciation-$150,000Patent$0
Total Assets$2,600,000Prepare the journal entries for a 80%
Asset Acquisition (using Big Company
Cash)AP$100,000Common Stock ($10 par)$450,000Account
DRCRAdditional Paid In Capital$600,000Retained
Earnings$1,450,000 Total Liabilities &
Equity$2,600,000Prepare the journal entries for a 80%
Acquisition by issuing 10,000 shares of Big Company StockBig
Company Balance Sheet (Consolidated)Little Company Balance
SheetAssets, Liabilities & EquitiesAssets, Liabilities &
EquitiesBook ValueAccount DRCRCashCash$35,000Investment
in LittleARAR$10,000Common
StockInventoryInventory$65,000Additional Paid In
CapitalLandLand$40,000Allocation of Excess SchedulePP&E
(net)PP&E$400,000Accumulated DepreciationAccumulated
Depreciation-$150,000GoodwillPatent$0Patent Total
Assets$400,000 Total AssetsAP$100,000APCommon
Stock$100,000Common Stock ($10 par)Additional Paid In
Capital$50,000Additional Paid In CapitalRetained
Earnings$150,000Retained Earnings Total Liabilities &
Equity$400,000NCI Total Liabilities & EquityAssume that
Book Value = Fair Value
