Answer: B
Before any actual work is begun you need to have a formal application so there’s something to be worked with.
You mow your neighbor's yard and he pays you $25. Which function of money does this BEST represent?
Medium of exchange. The function of money, medium of exchange, is the exchange of money for a good or service. They are facilitating the transaction by paying the neighbor for the lawn cutting service.
Answer:
Common Stock $90,000 (debit)
Retained Earnings $135,000 (debit)
Revaluation Reserve $75,000 debit)
Investment in Subsidiary $300,000 (credit)
Explanation:
The Parent (Investor) acquires the Assets and Liabilities (or Equity) of the Subsidiary (Investee) at their Acquisition date fair values.
Any excess of the Purchase Consideration over the Net Assets/ Equity taken over is known as Goodwill and is shown in the Consolidated financial Statements of the Group.
The above shows the elimination journal entry that would be prepared at the acquisition date. The Revaluation reserve has been created to adjust the fair value of PPE. There is no goodwill.
