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Dior Manufacturing purchased 100% of Venus, Inc. common stock for $900,000 when Venus had...

Question:

Dior Manufacturing purchased 100% of Venus, Inc. common stock for $900,000 when Venus had stockholders' equity consisting of $400,000 of common stock and $300,000 of retained earnings. In the consolidated balance sheet, Dior's investment in Venus will be shown at:

a. $0.

b. $700,000.

c. $900,000.

d. $100,000.

Investment

In business combination, the investment account should be eliminated and need not be presented in the statement of financial position.

Answer and Explanation:

A. $0

The investment account should be eliminated and not presented in the balance sheet.


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