Consolidated Balance Sheet Working Paper, Identifiable Intangibles, Goodwill International Technology Inc. (ITI) acquires all of the voting stock of Global Outsourcing Corporation (GOC) on June 30, 2010. Amounts paid are as follows (in millions): Cash consideration to the former shareholders of GOC $40 1,200,000 shares of new $1 par common stock issued 48 Registration fees on new stock issued, paid in cash 2.4 Outside legal and advisory services, paid in cash 4 Fair value of earnings contingency 1.6 The earnings contingency provides for a potential payout to the former shareholders of GOC at the end of the third year following acquisition. The balance sheets of both companies immediately prior to the acquisition are as follows. Fair values of GOC's assets and liabilities at the date of acquisition are also provided. ITI GOC Balance Sheets (in millions) Book Value Book Value Fair Value Current assets $160 $8 $12 Property, plant and equipment, net 400 104 56 Intangible assets 1,040 16 24 Total assets $1,600 $128 Current liabilities $120 $16 $16 Long-term liabilities 960 80 82.4 Common stock, par 16 3.2 Additional paid-in capital 440 48 Retained earnings 80 (20) Accumulated other comprehensive income (12) 2.4 Treasury stock (4) (1.6) Total liabilities and equity $1,600 $128 The intangible assets reported above consist of patents and trademarks. GOC also has the following previously unreported intangible assets that meet FASB ASC Topic 805 requirements for asset recognition: Fair Value Advanced technology $4 Customer lists 20 (a) Prepare the journal entry or entries ITI makes to record the acquisition on its own books (in millions and enter all decimal places). General Journal Description Debit Credit Investment in GOC AnswerCorrect AnswerCorrect AnswerMerger expensesContingent consideration liabilityEquity in net income for GOCGoodwillGain on purchaseRegistration fees on stockCorrect AnswerCorrect AnswerCorrect Common stock AnswerCorrect AnswerCorrect Additional paid-in capital AnswerCorrect AnswerCorrect AnswerMerger expensesContingent consideration liabilityEquity in net income for GOCGoodwillGain on purchaseRegistration fees on stockCorrect AnswerCorrect AnswerCorrect Cash AnswerCorrect AnswerCorrect (b) Prepare a working paper to consolidate the balance sheets of ITI and GOC at June 30, 2010. Enter answers in millions and enter all decimal places. Remember to use negative signs with your credit balance answers in the Dr (Cr) columns.