Solve the below problem:
Q: Fortuna Company issued 70,000 shares of $1 par stock, with a fair value of $20 per share, for 80% of the outstanding shares of Acappella Company. The firms had the following separate balance sheets prior to the acquisition:
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Assets
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Fortuna
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Acaooella
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|
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Current assets
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52,100.000
|
5 960.000
|
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Property, plant, and equipment (net)
|
4,600.000
|
1,300,000
|
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Goodwill
|
-
|
740 00Q
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|
|
|
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Total assets
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S6.700.000
|
S2 500.000
|
|
|
|
|
|
|
|
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Liabilities and Stockholders' Equity
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|
|
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Liabilities
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53,000.000
|
$ 800.000
|
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Common stock ($1 par)
|
800.000
|
|
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Common stock ($5 par)
|
|
200.000
|
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Paid-in capital in excess of par
|
2.200.000
|
300.000
|
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Retained earnings
|
700 000
|
1.200.000
|
|
|
|
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Total liabilities and equity
|
56 700 000
|
52 500 000
|
Book values equal fair values for the assets and liabilities of Acappella Company, except for the property, plant, and equipment, which have a fair value of $1,600,000.
Required:
a. What is the Goodwill/Gain associated with the acquisition:
b. What is the Non-Controlling Interest recorded in the consolidated balance sheet:
c. What is the balance of the assets and liabilities side of the consolidated balance sheet after the acquisition:
d. Record the two elimination entries associated with the acquisition of the company