Date of Acquisition Consolidation Eliminating Entries

Pennant Corporation acquired 80 percent of Saylor Companys common stock for $12,000,000 in cash. At the date of acquisition, Saylors $3,000,000 of reported net assets were fairly stated, except land was undervalued by $200,000 and unrecorded in-process R&D was valued at $1,500,000. The estimated fair value of the noncontrolling interest is $2,600,000 at the acquisition date.

Required (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 at the date of acquisition.

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