Use the Following Information to Answer the Question(s) Below

question 38

Essay

Use the following information to answer the question(s) below.
On January 1, 2014, Penelope Company acquired a 90% interest in Leah Company for $180,000 cash. On January 1, 2014, Leah Company had the following assets and liabilities:
Push-down accounting is used for the acquisition.
-On January 1, 2014, Jeff Company acquired a 90% interest in Marian Company for $198,000 cash. On January 1, 2014, Marian Company had the following assets and liabilities:
Push-down accounting is used for the acquisition.
Required:
1. Assume both companies use the entity theory. Prepare the elimination entry(ies) on consolidating work papers on January 1, 2014.
2. Assume both companies use the parent company theory. Prepare the elimination entry(ies) on consolidating work papers on January 1, 2014.

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Definitions:

Spontaneous Movement

Unplanned, involuntary, or natural movement occurring without conscious effort.

Physiological

Pertaining to the normal functioning and activities of living organisms and their parts, including all physical and chemical processes.

Haloperidol

A medication commonly used to treat psychotic disorders such as schizophrenia, acting as an antipsychotic by altering the effects of chemicals in the brain.

Acute Dystonic Reaction

A rapid onset of muscle contractions that can lead to involuntary twisting movements or abnormal postures.