Date of Acquisition Consolidation Eliminating Entries Proline Company acquired 70 percent of Saturn Corporation's common stock...
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Date of Acquisition Consolidation Eliminating Entries Proline Company acquired 70 percent of Saturn Corporation's common stock for $150 million in cash and stock. The estimated fair value of the noncontrolling interest was $50 million. At the date of acquisition, Saturn's book value was $30.0 30.000000 million, consisting of capital stock of $100,000, additional paid-in capital of $32.4 million, accumulated other comprehensive loss of $500,000, and treasury stock of $2.0 million. Saturn reports its identifiable net assets at amounts approximating fair value, with these exceptions: property is overvalued by $50 million, deferred tax liabilities resulting from the acquisition are $5 million, previously unreported identifiable intangibles have a fair value of $20 million, and Saturn has $10 million of goodwill on its books from a previous acquisition. a. Calculate total goodwill for this acquisition and its allocation to the controlling and noncontrolling interests. Total goodwill: 205,000,000 Goodwill to Proline (controlling interest): Goodwill to non-controlling interests: 155,000,000 50,000,000 x b. Prepare the working paper eliminating entries needed to consolidate the accounts of Proline and Saturn at the date of acquisition. Debit Credit (E) Accumulated other comprehensive loss 500,000 500,000 x Additional paid-in capital Capital stock Deferred tax liabilities Goodwill (old) Identifiable intangibles To eliminate the subsidiary's equity accounts (R) Property Deferred tax liabilities 32,400,000 32,400,000 x 100,000 100,000 x 5,000,000 5,000,000 x 10,000,000 20,000,000 10,000,000 x 20,000,000 x Identifiable intangibles Goodwill (old) 50,000,000 50,000,000 x 5,000,000 20,000,000 5,000,000 x 20,000,000 x 10,000,000 10,000,000 x 500,000 2,000,000 500,000 x 2,000,000 x 155,000,000 155,000,000 x Accumulated other comprehensive loss Treasury stock Goodwill (new) To revalue subsidiary's assets and liabilities to fair value Date of Acquisition Consolidation Eliminating Entries Proline Company acquired 70 percent of Saturn Corporation's common stock for $150 million in cash and stock. The estimated fair value of the noncontrolling interest was $50 million. At the date of acquisition, Saturn's book value was $30.0 30.000000 million, consisting of capital stock of $100,000, additional paid-in capital of $32.4 million, accumulated other comprehensive loss of $500,000, and treasury stock of $2.0 million. Saturn reports its identifiable net assets at amounts approximating fair value, with these exceptions: property is overvalued by $50 million, deferred tax liabilities resulting from the acquisition are $5 million, previously unreported identifiable intangibles have a fair value of $20 million, and Saturn has $10 million of goodwill on its books from a previous acquisition. a. Calculate total goodwill for this acquisition and its allocation to the controlling and noncontrolling interests. Total goodwill: 205,000,000 Goodwill to Proline (controlling interest): Goodwill to non-controlling interests: 155,000,000 50,000,000 x b. Prepare the working paper eliminating entries needed to consolidate the accounts of Proline and Saturn at the date of acquisition. Debit Credit (E) Accumulated other comprehensive loss 500,000 500,000 x Additional paid-in capital Capital stock Deferred tax liabilities Goodwill (old) Identifiable intangibles To eliminate the subsidiary's equity accounts (R) Property Deferred tax liabilities 32,400,000 32,400,000 x 100,000 100,000 x 5,000,000 5,000,000 x 10,000,000 20,000,000 10,000,000 x 20,000,000 x Identifiable intangibles Goodwill (old) 50,000,000 50,000,000 x 5,000,000 20,000,000 5,000,000 x 20,000,000 x 10,000,000 10,000,000 x 500,000 2,000,000 500,000 x 2,000,000 x 155,000,000 155,000,000 x Accumulated other comprehensive loss Treasury stock Goodwill (new) To revalue subsidiary's assets and liabilities to fair value
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Advanced Accounting
ISBN: 9781260247824
14th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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