Date of Acquisition Consolidation Eliminating Entries
Pennant Corporation acquired 80 percent of Saylor Company's common stock for $12,000,000 in cash. At the date of acquisition, Saylor's $3,000,000 of reported net assets were fairly stated, except land was undervalued by $200,000 and unrecorded in-process R&D was valued at $1,500,000. The estimated fair value of the non controlling interest is $2,600,000 at the acquisition date.
Required:-
(a) Calculate total goodwill and its allocation to the controlling and non controlling interests.
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Allocation of goodwill between controlling and non controlling interest:
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Total goodwill
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$Answer
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Pennant's goodwill
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Answer
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Goodwill to non controlling interest
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$Answer
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(b) Prepare the working paper eliminating entries needed to consolidate Pennant and Saylor at the date
of acquisition.
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Consolidation Journal
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Description
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Debit
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Credit
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(E)
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Answer Stockholders' equity - Saylor Investment in Saylor Cash
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Answer
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Answer
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Answer Stockholders' equity - Saylor Investment in Saylor Cash
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Answer
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Answer
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Non controlling interest in Saylor
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Answer
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Answer
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(R)
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Answer Land Investment in Saylor Cash
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Answer
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Answer
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IPR&D
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Answer
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Answer
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Goodwill
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Answer
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Answer
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Answer Land Investment in Saylor Cash
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Answer
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Answer
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Non controlling interest in Saylor
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Answer
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Answer
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