Question: The following are the balance sheets for Plate and Salad immediately prior to Plate's September 1, 2014, acquisition of Salad:
Consider the following cases:
Case 1 Plate buys 100% of Salad's common stock for $180,000 cash. The fair value of Salad's assets and liabilities equal their book value.
Case 2 Plate buys 100% of Salad's common stock for $210,000 cash. The fair value of Salad's land is $20,000 and of its buildings and equipment is $110,000. All other fair values equal book values.
Required: 1. Prepare the September 1, 2014, journal entry on Plate's books to record the acquisition of Salad.
2. Prepare the elimination entries needed to prepare a consolidated balance sheet immediately after the acquisition.
3. Prepare the consolidated balance sheet immediately after the acquisition.