On January 1, 2010, Walker Corporation has the following stockholders' equity accounts: Common Stock, $10 par $300,000 Retained Earnings 900,000 The fair market value of Walker's net identifiable assets on this date was equal to their book value. On January 1, 2010, Rau Corporation acquired 100 percent of the common stock of Walker Corporation for $1,320,000 cash. The elimination entry necessary
to prepare a consolidated balance sheet for this date is:
a. Common Stock(Walker) 300,000
Retained Earnings(Walker) 900,000
Goodwill 120,000
Investment in Walker Corporation(Rau) 1,320,000
b. Common Stock(Walker) 300,000
Retained Earnings(Walker) 900,000
Loss from Consolidation 120,000
Investment in Walker Corporation (Rau) 1,320,000
c. Common Stock(Walker) 300,000
Retained Earnings(Walker) 900,000
Investment in Walker Corporation (Rau) 1,200,000
d. Common Stock(Walker) 300,000
Retained Earnings(Walker) 900,000
Gain from Consolidation 120,000
Investment in Walker Corporation (Rau) 1,320,000
A
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