Question
Petra Corporation purchased all of the outstanding shares of Stuckey Corporation for $24,000,000. Stuckeys balance sheet at the date of acquisition is as follows: Book
Petra Corporation purchased all of the outstanding shares of Stuckey Corporation for $24,000,000. Stuckeys balance sheet at the date of acquisition is as follows:
Book Value | Fair Value | ||
Dr (Cr) | |||
Current assets | $ 8,000,000 | $ 6,500,000 | |
Plant assets | 90,000,000 | 60,000,000 | |
Current liabilities | (4,000,000) | (4,000,000) | |
Noncurrent liabilities | (69,000,000) | (67,000,000) | |
Capital stock | (2,000,000) | ||
Retained earnings | (23,000,000) |
Stuckey has previously unreported intangibles, meeting the criteria for capitalization, with a fair value of 35,000,000. Eliminating entry (R) on the consolidation working paper, is:
a. | a.
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b. | b.
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c. | c.
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d. | d.
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