Phoenix, Inc. acquired all of the outstanding common stock of Spark Corporation for $950 million cash plus 30 million shares of Phoenix's common stock having a market value of $25 per share. Registration fees were $5 million and merger-related consultant and legal fees were $8 million, paid in cash. Immediately prior to the acquisition, the trial balances of the two companies were as follows:

	Dr (Cr)
(in millions)	Phoenix	Spark
Current assets	$ 2,000	$200
Plant and equipment, net	11,900	700
Current liabilities	(500)	(150)
Long-term liabilities	(8,000)	(300)
Common stock, $1 par	(300)	(100)
Additional paid-in capital	(4,000)	(50)
Retained earnings	(1,100)	(300)
Totals	$0	$0

A review of the fair values of Spark's assets indicates that current assets are overvalued by $40 million, plant and equipment is overvalued by $250 million, and previously unreported brand names and trademarks have a fair value of $200 million.

Required

a. Prepare the entry Phoenix makes to record the acquisition of Spark.

Enter answers in millions.

Description		Debit	Credit
Investment in Spark		Answer	Answer
AnswerCashGoodwillMerger expensesRetained earnings		Answer	Answer
AnswerCashGoodwillMerger expensesRetained earnings		Answer	Answer
Common stock		Answer	Answer
Additional paid-in capital		Answer	Answer

b. Prepare working paper to consolidate the balance sheets of Phoenix and Spark at the date of acquisition.

Use negative signs with your Credit (Cr) answers in the Dr(Cr) columns (not in the Eliminations Credit column).

Consolidation Working Paper
	Accounts Taken From Books		Eliminations
(in millions)		Phoenix Dr(Cr)	Spark Dr(Cr)		Debit	Credit		Consolidated Balances Dr(Cr)
Current assets		Answer	$200			Answer	(R)	Answer
Plant and equipment, net		Answer	700			Answer	(R)	Answer
Investment in Spark		Answer				Answer	(E)	Answer
						Answer	(R)
Brand names and trademarks		Answer	Answer	(R)	Answer			Answer
Goodwill		Answer	Answer	(R)	Answer			Answer
Current liabilities		Answer	(150)					Answer
Long-term liabilities		Answer	(300)					Answer
Common stock, $1par		Answer	(100)	(E)	Answer			Answer
Additional paid-in capital		Answer	(50)	(E)	Answer			Answer
Retained earnings		Answer	(300)	(E)	Answer			Answer
Total		Answer	Answer		Answer	Answer		Answer