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 1 year ago

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