Plastic Corporation is contemplating a business combination with Steel Corporation at December 31, 2015. Steel's condensed balance sheet on that date appears below (in millions):

Assets	Book Value	Fair Value
Cash and receivables	$35,000	$35,000
Inventory	35,000	45,000
Equity method investments	18,000	20,000
Land	8,000	11,000
Buildings and equipment	7,000	14,000
Patents	5,000	10,000
Total assets	$108,000
Liabilities and Stockholders' Equity
Liabilities	$22,000	$22,000
Common stock	50,000	--
Retained earnings	36,000	--
Total liabilities and equity	$108,000

Required

Prepare the journal entry to record the business combination of Plastic and Steel for each of the following acquisition costs and combination methods (data provided below are in millions).

(a) Plastic merges with Steel by acquiring all of Steel's stock for $125,000 cash, in a merger. Other direct cash acquisition costs are $25,000.

(in millions)

General Journal
Description	Debit	Credit
Cash and receivables	Answer	Answer
Inventory	Answer	Answer
Equity method investments	Answer	Answer
Land	Answer	Answer
Buildings and equipment	Answer	Answer
Patents	Answer	Answer
Goodwill	Answer	Answer
AnswerGoodwillMerger expensesGain on acquisitionContingent consideration liabilityCashInvestment in Steel	Answer	Answer
Liabilities	Answer	Answer
AnswerGoodwillMerger expensesGain on acquisitionContingent consideration liabilityCashInvestment in Steel	Answer	Answer

(b) Plastic merges with Steel by acquiring all of Steel's stock for $100,000 cash, in a merger. Other direct cash acquisition costs are $10,000.

(in millions)

General Journal
Description	Debit	Credit
Cash and receivables	Answer	Answer
Inventory	Answer	Answer
Equity method investments	Answer	Answer
Land	Answer	Answer
Buildings and equipment	Answer	Answer
Patents	Answer	Answer
AnswerGoodwillMerger expensesGain on acquisitionContingent consideration liabilityCashInvestment in Steel	Answer	Answer
Liabilities	Answer	Answer
Cash	Answer	Answer
AnswerGoodwillMerger expensesGain on acquisitionContingent consideration liabilityCashInvestment in Steel	Answer	Answer

(c) Plastic acquires all of Steel's stock for $135,000 cash, in a stock acquisition. Other direct cash acquisition costs are $15,000.

(in millions)

General Journal
Description	Debit	Credit
AnswerGoodwillMerger expensesGain on acquisitionContingent consideration liabilityCashInvestment in Steel	Answer	Answer
Merger expenses	Answer	Answer
AnswerGoodwillMerger expensesGain on acquisitionContingent consideration liabilityCashInvestment in Steel	Answer	Answer