C_S4FCC_2021 · Question #40
Company A purchased 80% of Company B for 80 million in December of 2022. Company B's equity is 50 million. What accounting entries should be generated when consolidation is run for December of 2022?…
The correct answer is C. Debit goodwill 40 million D. Credit investment 80 million. When Company A purchases 80% of Company B for 80 million, the accounting entries generated when consolidation is run for December of 2022 should be: - Debit goodwill 40 million (80 million purchase price - 80% of 50 million equity) - Credit investment 80 million (reflecting the…
Question
Company A purchased 80% of Company B for 80 million in December of 2022. Company B's equity is 50 million. What accounting entries should be generated when consolidation is run for December of 2022? Note: There are 2 correct answers to this question.
Options
- ADebit goodwill 50 million
- BCredit investment 64 million
- CDebit goodwill 40 million
- DCredit investment 80 million
How the community answered
(55 responses)- A31% (17)
- B20% (11)
- C49% (27)
Explanation
When Company A purchases 80% of Company B for 80 million, the accounting entries generated when consolidation is run for December of 2022 should be: - Debit goodwill 40 million (80 million purchase price - 80% of 50 million equity) - Credit investment 80 million (reflecting the purchase
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