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on (debit balance) te the gain on acquisition and prepare Phelps' journal entry to record the acquisiti wers in millions escription equisition A ment in Skelton D Description went assets the eliminating entries necessary to consolidate the balance sheet accounts of P wers in millions Debit vestment in Skaton tifiable intangibles Credit Debit Credit

on (debit balance) te the gain on acquisition and prepare Phelps' journal entry to record the acquisiti wers in millions escription equisition A ment in Skelton D Description went assets the eliminating entries necessary to consolidate the balance sheet accounts of P wers in millions Debit vestment in Skaton tifiable intangibles Credit Debit Credit

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, Bargain Gain Phelps, Inc acquires all of the stock of Skelton Company by issuing 1 million shares of its capital stock with a fair value of $18/share. At the date of acquisition, Skelton's current ansets had a book value of $5 million and a fair value of $4 million, its noncurrent assets had a book value of $45 million and a fair value of $25 million, and its liabilities had a book value of $20 million, which approximated fair value Sketon also has previously unreported identifiable intangibles, valued at $12 million, that meet ASC Topic 805's criteria for recognition. Skelton's shareholders equity consists of capital stock of $38 million and a retained loss of $5 million (debit balance) Required a Calculate the gain on acquisition and prepare Phelps journal entry to record the acquisition on its own books. Enter answers in millions Description Gain on acquisition # Goodall Investment in Skelton (Current assets b. Prepare the eliminating entries necessary to consolidate the balance sheet accounts of Phelps and Skelton at the date of acquisition Enter answers in millions. Ref. Description Investment in Skelton (R)Identifiable intangibles Debit Noncurrent assets # Credit Debit Credit POF Reader
Transcribed Image Text:Eliminating Entries, Bargain Gain Phelps, Inc acquires all of the stock of Skelton Company by issuing 1 million shares of its capital stock with a fair value of $18/share. At the date of acquisition, Skelton's current ansets had a book value of $5 million and a fair value of $4 million, its noncurrent assets had a book value of $45 million and a fair value of $25 million, and its liabilities had a book value of $20 million, which approximated fair value Sketon also has previously unreported identifiable intangibles, valued at $12 million, that meet ASC Topic 805's criteria for recognition. Skelton's shareholders equity consists of capital stock of $38 million and a retained loss of $5 million (debit balance) Required a Calculate the gain on acquisition and prepare Phelps journal entry to record the acquisition on its own books. Enter answers in millions Description Gain on acquisition # Goodall Investment in Skelton (Current assets b. Prepare the eliminating entries necessary to consolidate the balance sheet accounts of Phelps and Skelton at the date of acquisition Enter answers in millions. Ref. Description Investment in Skelton (R)Identifiable intangibles Debit Noncurrent assets # Credit Debit Credit POF Reader
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