Date of Acquisition Consolidation Eliminating Entries

Pennant Corporation acquired 80 percent of Saylor Company's common stock for $12,000,000 in cash on January 2, 2013. At that date, Saylor's $7,200,000 of reported net assets were fairly stated, except land was undervalued by $600,000 and unrecorded in-process R&D was valued at $1,200,000. The estimated fair value of the noncontrolling interest is $2,400,000 at the acquisition date. (a) Calculate total goodwill and its allocation to the controlling and noncontrolling interests.

Allocation of goodwill between controlling and noncontrolling interest:
Total goodwill	$Answer
Pennant's goodwill	Answer
Goodwill to noncontrolling interest	$Answer

(b) Prepare the working paper eliminating entries needed to consolidate Pennant and Saylor on January 2, 2013.

Consolidation Journal
Description	Debit	Credit
(E)
AnswerCashStockholders' equity - SaylorInvestment in Saylor	Answer	Answer
AnswerInvestment in SaylorCashStockholders' equity - Saylor	Answer	Answer
Noncontrolling interest in Saylor	Answer	Answer
(R)
AnswerLandInvestment in SaylorCash	Answer	Answer
IPR&D	Answer	Answer
Goodwill	Answer	Answer
AnswerInvestment in SaylorLandCash	Answer	Answer
Noncontrolling interest in Saylor	Answer	Answer