On July 1, 2016, The Hershey Company acquired 75 percent of the common stock of Bagota Organic Chocolates. The \($1.2\) billion purchase price was paid in cash and newly-issued debt securities. The acquisition entry is reflected below in the two companies’ balance sheets just after the acquisition.

Independent appraisals produced the following fair value estimates for certain of Bagota’s previously recorded assets and liabilities. In addition, previously unreported customer-related intangibles have an estimated fair value of \($30\) million. Bagota’s noncontrolling interest has an estimated fair value of \($375\) million.

Required

a. Prepare a schedule to compute the total goodwill and its allocation to the controlling and noncontrolling interest.

b. Prepare a working paper to consolidate the balance sheets of Hershey and Bagota at July 1, 2016.

c. Prepare a formal consolidated balance sheet for Hershey and Bagota at July 1, 2016.

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(in millions) Assets Balance Sheets at July 1, 2016 Hershey Bagota Current assets $1,500 Property, plant and equipment, net. 1,600 $ 325 600 Investment in Bagota... 1,200 - Patents and trademarks. 1,300 75 Total assets $5,600 $1,000 Liabilities and Stockholders' Equity Current liabilities.. Long-term liabilities Common stock, par value Additional paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income (loss). Total liabilities and stockholders' equity. $1,600 1,900 $ 100 400 300 10 1,950 200 3,900 300 (4,000) (50) $5,600 (10) $1,000