Petrel Corporation acquires all of the stock of Samson Companyfor $30 million in cash. Samson’s balance sheet accounts at thedate of acquisition are listed below. Date-of-acquisition fairvalues for Samson’s assets and liabilities are also displayed.Samson has previously unreported developed technology valued at $6million, meeting the criteria for capitalization per ASC Topic805.

(in thousands)	Book Value Dr (Cr)	Fair Value Dr (Cr)
Cash	$2,000	$2,000
Accounts receivable	5,000	4,500
Inventories	30,000	15,000
Land, buildings and equipment, net	320,000	100,000
Trademarks	10,000	150,000
Current liabilities	(45,000)	(45,000)
Noncurrent liabilities	(250,000)	(245,000)
Common stock, $2 par	(1,000)
Additional paid-in capital	(80,000)
Retained earnings	5,500
Accumulated other comprehensive income	(500)
Treasury stock	4,000
Total	$0

Required

a. Prepare a schedule calculating the goodwill to be recognizedfor this acquisition.

Instructions:

When appropriate, use negative signs with your excess of fairvalue over book value answers (left column only).

Do not use negative signs with your answers in the rightcolumn.

Enter answers in thousands.

Acquisition cost			$Answer
Samson’s book value			Answer
Excess of acquisition cost over book value			Answer
Excess of fair value over book value:
Accounts receivable		Answer
Inventories		Answer
Land, buildings and equipment, net		Answer
Trademarks		Answer
Developed technology		Answer
Noncurrent liabilities		Answer	Answer
Goodwill			$Answer

b. Prepare the eliminating entries to consolidate the balancesheets of Petrel and Samson at the date of acquisition.

Enter answers in thousands.

Ref.	Description		Debit	Credit
(E)	Common stock		Answer	Answer
	Additional paid-in capital		Answer	Answer
	AnswerAccounts receivableAOCIGoodwillInvestment inSamsonRetained earningsTreasury stock		Answer	Answer
	AnswerAccounts receivableAOCIGoodwillInvestment inSamsonRetained earningsTrademarks		Answer	Answer
	AnswerAccounts receivableAOCIDevelopedtechnologyGoodwillInvestment in SamsonTreasury stock		Answer	Answer
	Investment in Samson		Answer	Answer
(R)	Trademarks		Answer	Answer
	Developed technology		Answer	Answer
	Noncurrent liabilities		Answer	Answer
	AnswerAccounts receivableAOCIGoodwillNoncurrentliabilitiesRetained earningsTreasury stock		Answer	Answer
	AnswerAccounts receivableAOCIGoodwillInvestment inSamsonRetained earningsTreasury stock		Answer	Answer
	AnswerAccounts receivableAOCIGoodwillInvestment inSamsonRetained earningsTreasury stock		Answer	Answer
	Inventories		Answer	Answer
	Land, buildings and equipment, net		Answer	Answer