Business, 16.04.2020 20:47 izzy890

On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena's common stock. There was no differential related to this transaction. The noncontrolling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was as follows: Common Stock ($10 par value)$500,000 Retained Earnings 350,000 Total$850,000 On January 1, 20X8, Pisa purchased an additional 12,500 shares directly from Siena for $25 per share. Based on the preceding information, the elimination entry to prepare the consolidated financial statements on December 31, 20X7 would include a:
A. credit to retained earnings for $350,000
B. credit to Investment in Siena Co. for $744,000
C. debit to common stock for $812,500
D. credit to additional paid-in capital for $187,500

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On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of...

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