Plummer Corporation acquired 90 percent of Softek Technologies' voting stock on June 15,2014, by issuing 2,000,000 shares of $2 par common stock with a fair value of $25,000,000. In addition, Plummer paid $500,000 in cash to the consultants and accountants who advised in the acquisition. Softek's stockholders' equity at the date of acquisition is as follows:

Softek's assets and liabilities were carried at fair value except as noted below:

The fair value of the noncontrolling interest is estimated to be $2,500,000 at the date of acquisition.
Required
a. Prepare the acquisition entry on Plummer's books and the working paper consolidation eliminating entries on June 15,2014, following U.S. GAAP.
b. Prepare the working paper consolidation eliminating entries on June 15,2014, following IFRS and the alternative valuation method for noncontrolling interests.

Transcribed Image Text:

Common stock..200,000 8,000,000 Additional paid-in capital... Treasury stock Total (800,000) (400,000) $12,000,000 Book Value Fair Value Plant assets, net....$12,000,000 Trademarks. Customer lists... Long-term debt... $9,000,000 1,500,000 1,000,000 2,100,000 2,000,000