Plum Corporation acquired 80 percent of Saucy Corporation's common shares on January 1, 20X7, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Saucy Corporation. Saucy prepared the following balance sheet as of December 31, 20X8: Cash$70,000 Accounts Payable$40,000 Accounts Receivable 60,000 Bonds Payable 50,000 Inventory 80,000 Common Stock 150,000 Buildings and Equipment 400,000 Additional Paid-In Capital 50,000 Less: Accumulated Depreciation (120,000) Retained Earnings 200,000 Total Assets$490,000 Total Liabilities and Equities$490,000 On January 1, 20X9, Saucy declares a stock dividend of 9,000 shares on its $5 par value common stock. The current

Question

market price per share of Saucy stock on January 1, 20X9, is $20.Based on the preceding information, the investment elimination entry required to prepare a consolidated balance sheet immediately after the stock dividend is issued will include a debit to Retained Earnings for:

A. $20,000
B. $155,000
C. $200,000
D. $65,000

Answer 1

Answer: C