On January $1,2023,$ Pascal Corp. acquired all of the voting stock of Siakam, Inc. Pascal paid $$41$

million to Siakam's shareholders, and issued $450,000$ shares of its $$2\mathrm{.}10$ par value common stock.

Pascal's stock has a market value of $$31$ per share. In addition, Pascal assumed an earnout

contingency with an estimated value of $$1$ million, and paid $$0\mathrm{.}1$ million in stock registration fees.

Immediately prior to the acquisition, the companies' respective trial balances were as follows.

Pascal Siakam

Dr$/($Cr$)$ Dr$/($Cr$)$

Cash $$128,400,000\mathrm{.}00$ $$4,500,000\mathrm{.}00$

Accounts receivable $$147,600,000\mathrm{.}00$ $$11,000,000\mathrm{.}00$

Inventory $$210,000,000\mathrm{.}00$ $$59,100,000\mathrm{.}00$

Property, plant, and equipment, net $$630,900,000\mathrm{.}00$ $$153,800,000\mathrm{.}00$

Intangible assets $$9,000,000\mathrm{.}00$ $$25,500,000\mathrm{.}00$

Accounts payable $$(95,000,000\mathrm{.}00)$ $$(12,000,000\mathrm{.}00)$

Long term debt $$(689,000,000\mathrm{.}00)$ $$(209,000,000\mathrm{.}00)$

Common stock $$(3,570,000\mathrm{.}00)$ $$(980,000\mathrm{.}00)$

Additional paid in capital $$(187,000,000\mathrm{.}00)$ $$(34,000,000\mathrm{.}00)$

Accum. other comprehensive income $$1,100,000\mathrm{.}00$ $$(4,800,000\mathrm{.}00)$

Treasury stock $$5,500,000\mathrm{.}00$ $$4,480,000\mathrm{.}00$

Retained earnings $$(157,930,000\mathrm{.}00)$ $$2,400,000\mathrm{.}00$

Total $$-$ $$-$

Siakam has inventory with a book value that exceeds its fair value by $$1$ million, and

equipment with a fair value that exceeds its book value by $$2$ 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 $$6,000,000\mathrm{.}00$

Lease contracts at favorable rates $$6,760,000\mathrm{.}00$

Business reputation $$5,760,000\mathrm{.}00$

Assembled work force $$5,200,000\mathrm{.}00$

Developed technology $$3,120,000\mathrm{.}00$

$$  

 

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.

Answer rating: 100% (QA)

a Journal Entry to Record the Acquisition on Pascals Books Date January 1 2023 1 To record the acquisition of Siakam Inc Investment in Siakam 45000 sh... View the full answer