ANSWER:

(E)

Common stock, par value. 10

Additional paid in capital. 150

retained earnings. 260

treasury stock. 50

accumulated other comprehensive income. 70

investment in softcloud. 350

(R)

property, plant and equimpent. 600

favorable lease agreement 150

goodwill. 500

inventories. 50

long term debt. 350

investment in softcloud. 850

QUESTION:

How do you get the 350 & 850 from "investment in softcloud"?

what is the steps and what does it mean?

REVIEW 2 Consolidation with Identifiable Intangibles Look at review problem #1 in Chapter 2, where IBM acquires SoftCloud Technologies for $1.2 billion in cash Assume IBM acquires all of SoftCloud's stock in a stock investment. Information on book values for both com- panies and fair values of SoftCloud's assets and liabilities is below. Balance Sheets of IBM and SoftCloud, Immediately After the Acquisition IBM SoftCloud Book value Book value Fair value (in millions) Dr (CT) Dr (Cr) Dr (CT) Cash and receivables........ $ 800 $ 400 $ 400 Inventories 6,000 850 800 Property, plant and equipment, net 25.000 2.900 3,500 Investment in SoftCloud. .... 1,200 Accounts payable.... (7.000) (300) (300) Long-term debt ......... (22,000) (3,500) (3,850) Common stock, par value... (100) (10) Additional paid-in capital... 2,500) (200) Retained earnings (1.300) Treasury stock ... 50 Accumulated other comprehensive income. (100) Total... 1260) In addition, the following items are not currently reported on SoftCloud's balance sheet: (in millions) Favorable lease agreements ....... Skilled workforce... Favorable press reviews on products... Fair value $150 Required: Prepare the consolidation working paper necessary to consolidate IBM and SoftCloud at the date of acquisition Solutions are located after the chapter assignments. ...OOOOOOOOOOOOOOOOOO