Winter Company acquired 75% interest in Summer Company for $10,000 in cash. The condensed balance sheets immediately prior to the acquisition are below:

	Winter Company	Summer	Company
	Book Value	Book Value	Fair Value
Cash and receivables	11,000	2,000	1,600
Inventories	7,000	3,000	2,200
Plant assets, net	12,000	5,000	3,000
Patents	2,000	1,000	2,000
Total assets	32,000	11,000
Current liabilities	6,000	2,500	2,500
Noncurrent liabilities	8,000	5,000	5,000
Common stock	5,000	500
Retained Earnings	13,000	3,000
Total liabilities and shareholders' equity	32,000	11,000

Additional information:

1. In addition to the above cash cost, out-of-pocket-merger-related costs of $400 were paid in cash

2. The acquisition agreement includes an earnings contingency agreement to be settled in cash; its value is $1,000

3. It is determined that Summer has an unreported preacquisition contingency related to a pending lawsuit, consisting of a liability with an estimated present value of $500

4. In-process research and developed owned by Summer is worth $2,000

5. The fair value of the 25% noncontrolling interest in Summer Company is $2,400

Required:

A. Set up a table starting with acquisition cost and determine goodwill as acquisition

B. Prepare the acquisition journal entry made by Winter Company

C. Prepare the working paper eliminating entries to consolidate the trial balance of Winter and Summer at date of acquisition

Only need to prepare the acquisition eliminating entries necessary to consolidate the balance sheet of the E and R entries. Make sure you provide how you calculated the (R) elimination of Investment in Summer and the Noncontrolling interest in Summer

Here is an example of what the (e) and (r) entries should look like

(e)

Capital stock	2,500,000
Retained earnings	7,400,000
Accumulated other comprehensive income	100,000
Investment in Gold Road (80%)		8,000,000
Noncontrolling interest in Gold Road (20%)		2,000,000

(r)

Customer list	5,000,000
Goodwill	36,000,000
Investment in Gold Road		34,600,000
Noncontrolling interest in Gold road		6,400 000