Pirin Company acquires all of the voting stock of Skoda Automotive for $40 million in cash. Skoda's balance sheet accounts at the date of acquisition are listed below.

(in millions)Dr (Cr)

Current assets$1.2

Property, plant and equipment10.8

Current liabilities(2.0)

Long-term liabilities(7.9)

Capital stock(0.8

)Retained earnings(1.6)

Accumulated other comprehensive income0.3

Total$0.0

Date-of-acquisition book values approximate fair value for all reported assets and liabilities. The following previously unreported intangibles are identified as belonging to Skoda, along with their estimated fair values at the date of acquisition (in millions):

Synergies with Pirin technologies$2.0

Order backlogs 1.5

Technical expertise of workforce 8.0

Cost savings on future contracts 3.5

Developed technology 6.0

Required

a. Prepare a schedule calculating the goodwill to be recognized for this acquisition.

• Do not use negative signswith your answers.
• Enter answers in millions (do not round answers).

b. Prepare the eliminating entries necessary to consolidate the balance sheet accounts of Pirin and Skoda at the date of acquisition.

Enter answers in millions.Do not round answers.