Ch 3 MP Help

Required Parts (show calculations): 1) On the consolidation working paper at the date of acquisition, elimination (E) credits the investigation account by: a. $2,400 b. $3,400 c. $5,000 d. $13,000

2) On the consolidation working paper at the date of acquisition, elimination (R) debits identifiable intangible assets by: a. $10,000 b. $13,000 c. $15,000 d. $23,000

3) On the consolidation balance sheet at the date of acquisition, elimination (R): a. credits long-term debt by $400 b. debits long-term debt by $11,600 c. credits long-term debt by $11,600 d. debits long-term debt by $400

y pays S10.000 in cash and issues stock with a fair value of $40,000 to acquire all of SX Cor- poration's stock. SX will be a subsidiary of PR. Balance sheet accounts just prior to the acquisition are as follows, in trial balance format: PR Company Book value SX Corporation Book value Fair value Dr (Cr) Dr (Cr) Dr (Cr) s 4,200 6,000 14,000 2,000) (11,600) $ 14,000 110,000 800 (13,000) (60,000) (44,400) (8,000) (200) 800 Current assets Property, plant & equipment, net. Identifiable intangible assets Current liabilities. Long-term debt Capital stock .. Retained earnings Accumulated other comprehensive income.. $2,000 10,000 4,000 (1,600) (12,000) (5,000) 8,000) 1,000 9,600 Total. PR's consultants find these items that are not reported on SX's balance sheet: Fair value Potential contracts with new customers Advanced production technology Future cost savings Customer lists $6,000 4,000 2,000 1,000 Outside consultants are paid $200 in cash, and registration fees to issue PR's new stock are $400