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a. Prepare a schedule calculating the goodwill to be recognized for this acquisition. Acquisition cost 0x SSC's book value Excess of acquisition cost over book value $ Excess of fair value over book value: Equipment Goodwill (E) Capital stock 0x b. Prepare working paper eliminating entries (E) and (R) to consolidate the balance sheet accounts of Polaris and SSC at the date of acquisition. Credit (8) 0x Retained earnings Goodwill Treasury stock To eliminate SSC's equity accounts against the investment account くくくくく Debit 2 0 0 0 0 පසුප 0 0x 9x 50 x 1 x 0x 0x 0x

a. Prepare a schedule calculating the goodwill to be recognized for this acquisition. Acquisition cost 0x SSC's book value Excess of acquisition cost over book value $ Excess of fair value over book value: Equipment Goodwill (E) Capital stock 0x b. Prepare working paper eliminating entries (E) and (R) to consolidate the balance sheet accounts of Polaris and SSC at the date of acquisition. Credit (8) 0x Retained earnings Goodwill Treasury stock To eliminate SSC's equity accounts against the investment account くくくくく Debit 2 0 0 0 0 පසුප 0 0x 9x 50 x 1 x 0x 0x 0x

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Eliminating Entries, Goodwill Polaris Company acquires all of the stock of SSC, Inc. for $100 million in cash. At the date of acquisition, SSC's equity consists of capital stock of $25 million, retained earnings of $40 million (credit balance), and accumulated other comprehensive income of $5 million (credit balance), SSC's books report current assets of $20 million, equipment of $150 million, and liabilities of $100 million. Stark's assets and liabilities are reported on its books at amounts that approximate fair value, except that equipment with a book value of $20 million has a fair value of $30 million. Stark has no previously unreported identifiable intangible assets. Required Note: Provide all answers in millions. Note: Do not use negative signs. a. Prepare a schedule calculating the goodwill to be recognized for this acquisition. Acquisition cost SSC's book value Excess of acquisition cost over book value $ Excess of fair value over book value: Equipment Goodwill (E) Capital stock (R) $ b. Prepare working paper eliminating entries (E) and (R) to consolidate the balance sheet accounts of Polaris and SSC at the date of acquisition. Credit Retained earnings Goodwill 0x 0 x 0x 0x 0 x Treasury stock To eliminate SSC's equity accounts against the investment account > > > > > > > To revalue SSC's assets and liabilities to fair value Debit 2 0 0 0 0 0 0 0x 9 x 50 x 1 x 0 x 0* 0 x
Transcribed Image Text:Eliminating Entries, Goodwill Polaris Company acquires all of the stock of SSC, Inc. for $100 million in cash. At the date of acquisition, SSC's equity consists of capital stock of $25 million, retained earnings of $40 million (credit balance), and accumulated other comprehensive income of $5 million (credit balance), SSC's books report current assets of $20 million, equipment of $150 million, and liabilities of $100 million. Stark's assets and liabilities are reported on its books at amounts that approximate fair value, except that equipment with a book value of $20 million has a fair value of $30 million. Stark has no previously unreported identifiable intangible assets. Required Note: Provide all answers in millions. Note: Do not use negative signs. a. Prepare a schedule calculating the goodwill to be recognized for this acquisition. Acquisition cost SSC's book value Excess of acquisition cost over book value $ Excess of fair value over book value: Equipment Goodwill (E) Capital stock (R) $ b. Prepare working paper eliminating entries (E) and (R) to consolidate the balance sheet accounts of Polaris and SSC at the date of acquisition. Credit Retained earnings Goodwill 0x 0 x 0x 0x 0 x Treasury stock To eliminate SSC's equity accounts against the investment account > > > > > > > To revalue SSC's assets and liabilities to fair value Debit 2 0 0 0 0 0 0 0x 9 x 50 x 1 x 0 x 0* 0 x
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