ACCOUNTING-GAGA Company and Little Bieber Company had the following balance sheets
- GAGA Company and Little Bieber Company had the following balance sheets on January 1, 2015
GAGA Little Bieber
Cash 2,000,000 40,000
Inventory 1,000,000 90,000
Equipment 2,000,000 500,000
a/d equip (1,000,000) (200,000)
total assets 4,000,000 430,000
accts payable 1,000,000 20,000
common stock 2,000,000 10,000
retained earnings 1,000,000 400,000
On January 2nd GAGA purchased 80% of Little Bieber from Little Bieber’s stockholders for $750,000. At that time Little Bieber’s equipment was worth $400,000 with all other assets and liabilities having a book value equal to their fair market value.
REQUIRED;
A. MAKE THE JOURNAL ENTRY GAGA MAKES WHEN IT BUYS THE 80% OF LITTLE BIEBER
B. MAKE THE JOURNAL ENTRY LITTLE BIEBER MAKES WHEN 80% OF ITS STOCK IS PURCHASED BY GAGA
C. MAKE A CONSOLIDATED BALANCE SHEET ON JANUARY 2ND (DON’T FORGET GAGA SPENT $750,000 )
a. MAKE THE NECESSARY ELIMINATION ENTRIES
-
Rating:
/5
Solution: ACCOUNTING-GAGA Company and Little Bieber Company had the following balance sheets