On January 1 , 2 0 2 3 , Pascal Corp. acquired all of the voting stock
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Question:
On January Pascal Corp. acquired all of the voting stock of Siakam, Inc. Pascal paid $
million to Siakam's shareholders, and issued shares of its $ par value common stock.
Pascal's stock has a market value of $ per share. In addition, Pascal assumed an earnout
contingency with an estimated value of $ million, and paid $ million in stock registration fees.
Immediately prior to the acquisition, the companies' respective trial balances were as follows.
Pascal Siakam
DrCr DrCr
Cash $ $
Accounts receivable $ $
Inventory $ $
Property, plant, and equipment, net $ $
Intangible assets $ $
Accounts payable $ $
Long term debt $ $
Common stock $ $
Additional paid in capital $ $
Accum. other comprehensive income $ $
Treasury stock $ $
Retained earnings $ $
Total $ $
Siakam has inventory with a book value that exceeds its fair value by $ million, and
equipment with a fair value that exceeds its book value by $ million. Book value
approximates fair value for all of Siakam's other reported assets and liabilities. In addition,
Siakam has the following unreported potential assets, with fair values shown.
Brand names $
Lease contracts at favorable rates $
Business reputation $
Assembled work force $
Developed technology $
Required:
a Prepare the journal entry to record the acquisition on Pascal's books.
b Prepare the E and R eliminating entries required to consolidate Pascal and Siakam at the
date of acquisition.
c Prepare a consolidation worksheet to consolidate Pascal and Siakam at the date of acquisition.
Note that Pascal's trial balance should be updated to reflect the effects of your entry from part a
d Prepare a concolidated balance sheet immediately after the acquisition in good form.
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
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