Business, 17.02.2020 21:21 Ezasha

1. Salsa Company's equity accounts consist of capital stock of $1,500,000 and retained earnings of $500,000. Prance Company pays $8,000,000 for all the voting stock of Salsa Company. The fair value of Salsa's identifiable net assets is $6,200,000 greater than book value. Salsa uses pushdown accounting to revalue its net assets at the date of acquisition. Eliminating entry (E) on the consolidation working paper includes A. A $500,000 credit to retained earnings. B. A $500,000 debit to retained earnings. C. A $6,000,000 debit to pushdown capital. D. A $6,700,000 debit to pushdown capital.

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