Acquisition Entry and Consolidation Working Paper Phoenix, Inc. acquired all of the outstanding common stock of Spark Corporation for $950 million cash plus 30 million shares of Phoenixs common stock having a market value of $25 per share. Registration fees were $5 million and merger-related consultant and legal fees were $8 million, paid in cash. Immediately prior to the acquisition, the trial balances of the two companies were as follows:

(in millions)					Phoenix	Spark
Current Assets					$2,000	$200
Plant and equipment, net					$11,900	$700
Current Liablities					($500)	($150)
Long-term Liablities					($8,000)	($300)
Common stock, $1 par					($300)	($100)
Additional paid-in capital					($4,000)	($50)
Retained Earnings					($1,100)	($300)
Totals					$0	$0

A review of fair values of Sparks assets indicates that current assets are overvalued by $40 million, plant and equipment is over valued by $250 million, and previously unreported brand names and trademarks have a fair value of $200 million.

Required:

1. Prepare the entry Phoenix makes to record the acquisition of Spark.
2. Prepare a working paper to consolidate the balance sheets of Phoenix and Spark at the date of the acquisition.