Eliminating Entries, Goodwill

Pendragon Corporation acquired all of the stock of Sherwood, Inc. for $500 million in cash. Sherwoods shareholders equity accounts at the date of acquisition were as follows:

(in millions)
Common stock, par	$2
Additional paid-in capital	25
Retained earnings (deficit)	(50)
Accumulated other comprehensive loss	(3)
Treasury stock	(2)
Total shareholders' equity	$(28)

The following previously unreported assets of Sherwood were reported in the acquisition (in millions):

Customer lists	$70
Brand names	150

Sherwoods fixed assets are overstated by $35 million, but the book values of its other assets and liabilities approximate fair value.

(a) Calculate the goodwill for this acquisition.

$Answer million

(b) Present the working paper eliminating entries necessary to consolidate the balance sheets of Pendragon and Sherwood at the date of acquisition.

Enter answers in millions.

Consolidation Journal
Description	Debit	Credit
(E)
Common stock	Answer	0
Additional paid-in capital	Answer	0
Answer	Answer	0
Retained earnings	0	Answer
Accumulated other comprehensive loss	0	Answer
Answer	0	Answer
(R)
Customer lists	Answer	0
Brand names	Answer	0
Answer	Answer	0
Fixed assets, net	0	Answer
Answer	0	Answer