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Question: pico acquired 90 of salsas outstanding shares on january 2016...

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Pico acquired 90% of Salsa’s outstanding shares on January 2016 for $342,000 in cash. On that date, the noncontrolling interest had a fair value of $38,000 and Salsa’s common stock and retained earnings accounts were $150,000 and $176,000, respectively. Salsa owned a building with a nine-year remaining life that was undervalued by $18,000. Any remaining excess cost was attributable to unpatented technology having a six-year life. Salsa sells inventory to Pico as follows: Year Cost to Salsa Transfer Price to Pico Inventory remaining at year end (at transfer price) 2016 $69,000 $115,000 $25,000 2017 81,000 135,000 37,500 2018 92,800 160,000 50,000 At December 31, 2018, Pico owes Salsa $16,000 for inventory it purchased during the period. Financials as of December 31, 2018 are attached.

Pico Salsa
Sales revenues              (862,000)              (366,000)
Cost of goods sold                 515,000                 209,000
Expenses                 185,400                   67,000
Equity in subisidiary income                 (68,400)                            -  
Net income              (230,000)                 (90,000)
Retained earnings 1/1/18              (488,000)              (278,000)
Net income              (230,000)                 (90,000)
Dividends                 136,000                   27,000
Retained earnings 12/31/18              (582,000)              (341,000)
Cash and receivables                 146,000                   98,000
Inventory                 255,000                 136,000
Investment in Salsa                 450,000                            -  
Land, buildings and equipment, net                 964,000                 328,000
Total assets             1,815,000                 562,000
Liabilities              (718,000)                 (71,000)
Common stock              (515,000)              (150,000)
Retained earnings, 12/31/18              (582,000)              (341,000)
Total liabilities and equity           (1,815,000)              (562,000)

1) Prepare the elimination entries

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