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Former Member
May 14, 2008 at 02:57 PM

Divesture entires

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I have question on the following question on consolidation...

Company A has invested $100 in COmpany B in 1st quarter of 2007.At the end of 1st quarter of 2008, the plant is soldoff fully by company B for $200 and working capital is transferred to Company A.

Following is the trail balance of company B before sale.

Plant : $80(Debit)

Working cpaital $70(Debit)

Capital $100(Credit)

Retained Earning $50(Credit)

Company A considers this as total sale of investment. Company B books need to be closed and working capital has to be transferred to Compaby A.

What will be entried passed by Company A and Company B in BCS and ECC seperately.