$$ Based on Chapter $5,$ so NCI and a Differential is involved. Key pages are $184$ through $191.$

Part $1$

On January $1,2024,$ Puerto Rico Corp. bought $80\%$ of the stock of San Juan Corp. for $$568,000.$

The Balance Sheets of the two companies immediately before the acquisition $($January $1,2024)$ of

San Juan Corp. showed the following:

As reflected above, on the date of acquisition the Book Value of Sandusky equaled its Fair Market

Value $($FMV$)$ except for the following items:

The land was assessed at a FMV of $$140,000$

Trademarks were assessed at a FMV of $$60,000$

The fair value process led to the identification of previously unrecorded identifiable

intangible assets worth $$30,000$ and with a $2-$year life

Required:

A$.$ List all journal entries Puerto Rico Corp. makes to record its investment in Sandusky on the

date of acquisition.

B$.$ List all Consolidation$/$Elimination Entries needed in order to prepare a workpaper for the

consolidated Balance Sheet of Puerto Rico and San Juan immediately after the combination

$($January $1,2024).$

C$.$ Prepare a workpaper for the consolidated Balance Sheet of Portsmouth and Sandusky

immediately after the combination $($January $1,2024).$ Show all necessary elimination entries in

their proper columns $($similar to Figure $5-2).$

Check Figures:

Consolidated Assets $=$$$3,092,000$

NCI in Net Assets of San Juan $=$$$142,000$