Subsidiary with Preferred Stock Outstanding
Clayton Corporation purchased 75 percent of the common stock and 40 percent of the preferred stock of Topple Company on January 1, 20X6, for $270,000 and $80,000, respectively. At the time of purchase, the fair value of the common shares of Topple held by the noncontrolling interest was $90,000. Topple’s balance sheet contained the following balances:
Preferred Stock ($10 par value) | $200,000 |
Common Stock ($5 par value) | 150,000 |
Retained Earnings | 210,000 |
Total Stockholders’ Equity | $560,000 |
Required
Give the eliminating entries needed to prepare a consolidated balance sheet immediately after Clayton purchased the Topple shares.
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