Pinnacle Corporation acquired all of Stengl Corporation's common stock by issuing 350,000 shares of $1 par common stock with a current market value of $8,000,000. Related accountants' and attorneys' fees were $300,000, paid in cash. The total book value of Stengl's shareholders' equity consists of capital stock of $160,000 and retained earnings of $1,440,000. Book values and fair values of Stengl's assets and liabilities are given below:

	Book Value	Fair Value
Cash and receivables	$640,000	$640,000
Inventories	880,000	720,000
Plant assets, net	1,280,000	800,000
Current liabilities	(800,000)	(800,000)
Long-term debt	(400,000)	(380,000)
Totals	$1,600,000	$980,000

In addition, Stengl has previously unrecorded identifiable intangible assets with a fair value of $960,000 that meet ASC 805 criteria for recognition.

Required

(a) Prepare the entry Pinnacle makes to record the acquisition on its own books.

Enter numerical answers using all zeros (do not abbreviate to thousands or millions).

General Journal
Description	Debit	Credit
Investment in Stengl	Answer	Answer
AnswerMerger expensesCashGoodwillEquity in net income of StenglRetained earningsEarnout liability	Answer	Answer
Common stock	Answer	Answer
Additional paid-in capital	Answer	Answer
AnswerMerger expensesCashGoodwillEquity in net income of StenglRetained earningsEarnout liability	Answer	Answer

(b) Prepare the working paper eliminating entries to consolidate the balance sheets of Pinnacle Corporation and Stengl Corporation at the date of acquisition.

Enter numerical answers using all zeros (do not abbreviate to thousands or millions).

ConsolidationJournal
Description	Debit	Credit
(E)
Capital stock	Answer	Answer
AnswerRetained earningsInvestment in StenglGoodwillGain on purchaseEquity in net income of StenglCapital stockCash	Answer	Answer
AnswerRetained earningsInvestment in StenglGoodwillGain on purchaseEquity in net income of StenglCapital stockCash	Answer	Answer
(R)
Long-term debt	Answer	Answer
Identifiable intangible assets	Answer	Answer
AnswerRetained earningsInvestment in StenglGoodwillGain on purchaseEquity in net income of StenglCapital stockCash	Answer	Answer
Plant assets, net	Answer	Answer
Inventories	Answer	Answer
AnswerRetained earningsInvestment in StenglGoodwillGain on purchaseEquity in net income of StenglCapital stockCash	Answer	Answer

Acquisition and Eliminating Entries, Acquisition Expenses Pinnacle Corporation acquired all of Stengl Corporation's common stock by issuing 350,000 shares of 1 par common stock with a current market value of $8,000,000. Related accountants and attomeys' fees were $200,000, paid in cash. The total book value of Steng's shareholdersequity consists of capital stock of $160,000 and retained earnings of $1,440,000. Book values and fair values of Stengi's assets and liabilities are given below. Book Value Fair value Cash and L5640,000 5640,000 220,000 1,280,000 800,000 (800,000 (400,000 300.000 31,600,000 3180,000 res 880,000 00000 Long-lum ut Total In addition, Stengl has previously unrecorded identifiable intangible assets with a fair value of $950,000 that meet ASC 80s criteria for recognition Required () Prepare the entry Pinnacle makes to record the acquisition on its own books. Enter numerical answers using all deras (do not abbreviate to thousands or millions). General journal Description Debe Credit Istment in Sang 0 0 D Common stock Additional pidin Capital D 0 0 0 (b) Prepare the working paper eliminating entries to consolidate the balance sheets of Pinnacle Corporation and Stengl Corporation at the date of acquisition Enter numerical answers using all zeras (do not abbreviate to thousands or millions). Consolidationjournal Description Debit Credit Capital stock 0 0 O 0 0 Identifiable 0 0 D 0 0 0 Plant 0 O 0 Please answer all parts of the