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Date of Acquisition Consolidation Eliminating Entries Pennant Corporation acquired 80 percent of Saylor Company's common stock...

Date of Acquisition Consolidation Eliminating Entries

Pennant Corporation acquired 80 percent of Saylor Company's common stock for $12,000,000 in cash on January 2, 2013. At that date, Saylor's $7,200,000 of reported net assets were fairly stated, except land was undervalued by $600,000 and unrecorded in-process R&D was valued at $1,200,000. The estimated fair value of the noncontrolling interest is $2,400,000 at the acquisition date.

(a) Calculate total goodwill and its allocation to the controlling and noncontrolling interests.

Allocation of goodwill between controlling and noncontrolling interest:
Total goodwill $Answer
Pennant's goodwill Answer
Goodwill to noncontrolling interest $Answer

(b) Prepare the working paper eliminating entries needed to consolidate Pennant and Saylor on January 2, 2013.

Consolidation Journal
Description Debit Credit
(E)
AnswerCashStockholders' equity - SaylorInvestment in Saylor Answer Answer
AnswerInvestment in SaylorCashStockholders' equity - Saylor Answer Answer
Noncontrolling interest in Saylor Answer Answer
(R)
AnswerLandInvestment in SaylorCash Answer Answer
IPR&D Answer Answer
Goodwill Answer Answer
AnswerInvestment in SaylorLandCash Answer Answer
Noncontrolling interest in Saylor Answer Answer

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ekkarill92 answered 2 years ago
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