Consolidation Working Paper, Date of Acquisition On July 1, 2020, Petra Foods acquired 75 percent of the common stock of Schmidt Confections. The $1.2 billion purchase price was paid in cash. The acquisition entry is reflected below in the two companies' balance sheets just after the acquisition.

Independent appraisals produced the following fair value estimates for certain of Schmidt's previously recorded assets and liabilities. In addition, previously unreported customer-related intangibles have an estimated fair value of $30 million. Schmidt's noncontrolling interest has an estimated fair value of $375 million.

Required

a. Prepare a schedule to compute the total goodwill and its allocation to the controlling and noncontrolling interest. 

b. Prepare a working paper to consolidate the balance sheets of Petra and Schmidt at July 1, 2020. 

c. Prepare a formal consolidated balance sheet for Petra and Schmidt at July 1, 2020.

Balance Sheets at July 1, 2020 (in millions) Petra Schmidt Assets Current assets $ 325 $1,500 1,600 1,200 1,300 Property, plant and equipment, net. 600 Investment in Schmidt Patents and trademarks.. Total assets.... 75 $5,600 $1,000 Llablitles and Shareholders' Equity Current liabilities.. Long-term liabilities.. Common stock, par value. Additional paid-in capital. Retained earnings Treasury stock ... Accumulated other comprehensive income (loss) $ 100 $1,600 1,900 300 400 10 200 1,950 3,900 (4,000) (50) 300 (10) Total liabilities and shareholders' equity... $5,600 $1,000