Plummer Corporation acquired 90 percent of Softek Technologies’ voting stock by issuing 2,000,000 shares of \($2\) par common stock with a fair value of \($25,000,000.\) In addition, Plummer paid \($500,000\) in cash to the consultants and accountants who advised in the acquisition. Softek’s stockholders’ equity at the date of acquisition is as follows:

Softek’s assets and liabilities were carried at fair value except as noted below:

The fair value of the noncontrolling interest is estimated to be \($2,500,000,\) at the date of acquisition.

Required

a. Prepare the acquisition entry on Plummer’s books and the working paper consolidation eliminating entries at the date of acquisition, following U.S. GAAP.

b. Prepare the working paper consolidation eliminating entries at the date of acquisition, following IFRS and the alternative valuation method for noncontrolling interests.

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Common stock.... Additional paid-in capital.. 200,000 8,000,000 Retained earnings 5,000,000 Accumulated other comprehensive income.. (800,000) Treasury stock.. (400,000) Total.. $12,000,000