Desidero Corporation Acquired 100% of the Voting Stock of Basile

question 3

Multiple Choice

Desidero Corporation acquired 100% of the voting stock of Basile Company for $200,000. On the date of acquisition, Basile Company's stockholders' equity consisted of: Common Stock, $130,000 and Retained Earnings, $70,000. On the date of the acquisition, Desidero Company's stockholders' equity consisted of: Common Stock $470,000 and Retained Earnings $1,010,000. The elimination entry to be made on a work sheet, to prepare a consolidated balance sheet on the acquisition date, would include a:

• A)debit to Common Stock for $130,000.
• B)debit to Investment in Basile for $200,000.
• C)credit to Common Stock for $130,000.
• D)credit to Retained Earnings for $70,000.

---

Definitions:

Rate Of Change

The speed at which a variable quantity, such as a number or measurement, changes over a certain period of time.

Sheet Steel

A type of steel that has been rolled into sheets; commonly used in manufacturing and construction industries.

Risk Profile

A plot showing how the value of the firm is affected by changes in prices or rates.

Interest Rate Volatility

The extent to which interest rates fluctuate over time due to market forces, economic policies, or external events.