Desidero Corporation Acquired 100% of the Voting Stock of Basile

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.