Pringer Company acquires all of the stock of Stark, Inc. for $68 million in cash. At the date of acquisition, Stark's equity consists of capital stock of $7 million, retained earnings of $48 million (credit balance), and treasury stock of $3 million. Stark's books report current assets of $26 million, property of $100 million, and liabilities of $104 million. Stark's assets and liabilities are reported on its books at amounts that approximate fair value, except that property with a book value of $33 million has a fair value of $29 million, and previously unreported identifiable intangible assets with a fair value of $20 million meet the requirements for capitalization per ASC Topic 805. Required Prepare working paper eliminating entries (E) and (R) to consolidate the balance sheet accounts of Pringer and Stark at the date of acquisition. Note: Provide all answers in millions.

Pringer Company acquires all of the stock of Stark, Inc. for $68 million in cash. At the date of acquisition, Stark's equity consists of capital stock of $7 million, retained earnings of $48 million (credit balance), and treasury stock of $3 million. Stark's books report current assets of $26 million, property of $100 million, and liabilities of $104 million. Stark's assets and liabilities are reported on its books at amounts that approximate fair value, except that property with a book value of $33 million has a fair value of $29 million, and previously unreported identifiable intangible assets with a fair value of $20 million meet the requirements for capitalization per ASC Topic 805. Required Prepare working paper eliminating entries (E) and (R) to consolidate the balance sheet accounts of Pringer and Stark at the date of acquisition. Note: Provide all answers in millions.

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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