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Date of Acquisition Consolidation Eliminating Entries Proline Company acquired 70 percent of Saturn Corporation's common stock for $150 million in cash and stock. The estimated fair value of the noncontrolling interest was $50 million. At the date of acquisition, Saturn's book value was $30.0 30.000000 million, consisting of capital stock of $100,000, additional paid-in capital of $32.4 million, accumulated other comprehensive loss of $500,000, and treasury stock of $2.0 million. Saturn reports its identifiable net assets at amounts approximating fair value, with these exceptions: property is overvalued by $50 million, deferred tax liabilities resulting from the acquisition are $5 million, previously unreported identifiable intangibles have a fair value of $20 million, and Saturn has $10 million of goodwill on its books from a previous acquisition. a. Calculate total goodwill for this acquisition and its allocation to the controlling and noncontrolling interests Total goodwill: 10,000,000 x Goodwill to Proline (controlling interest): 7,000,000 x 3,000,000 x Goodwill to non-controlling interests: b. Prepare the working paper eliminating entries needed to consolidate the accounts of Proline and Saturn at the date of acquisition. Debit Credit (E) Capital stock (R) Additional paid-in capital Accumulated other comprehensive loss Treasury stock Identifiable intangibles Deferred tax liabilities To eliminate the subsidiary's equity accounts + Check # + + # # + # + To revalue subsidiary's assets and liabilities to fair value 100,000 32,400,000 0 0 0 0 0 0 0 0 0 0 0 0 0 500,000 2,000,000 20,000,000 x 5,000,000 x 0x 0x 0x 0x 0x 0x 0x

Date of Acquisition Conselidation fliminating totries a. Caiculate tocul goodwall for this atquivion and its allocation to the controling and noncontroling intecests

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