Question

Below are the pre-combination condensed balance sheets of Princecraft and Sylvan Companies just prior to Princecraft's...

Below are the pre-combination condensed balance sheets of Princecraft and Sylvan Companies just prior to Princecraft's acquisition of 90 percent of the voting shares of Sylvan for $43 million in chas. The book value of Sylvan Company's net assets approximate fair value. The noncontrolling interest in Sylvan has a fair value of $4,250,000.

Princecraft Company Sylvan Company
Cash $60,000,000 $2,000,000
Other current assts $20,000,000 $8,000,000
Property and equipment, net $70,000,000 $15,000,000
Total assets $150,000,000 $25,000,000
Total liabilties $30,000,000 $8,000,000
Common stock $15,000,000 $5,000,000
Additional paid-in capital $45,000,000 $10,000,000
Retained earnings $60,000,000 $2,000,000
Total liabilities and equity $150,000,000 $25,000,000

Required:

a. Calculate total goodwill and its allocation to the controlling and noncontrolling interests.

b. Prepare the consolidation working paper at the date of acquisition.

c. Prepare the consolidated balance sheet at the date of acquisition, in good form.

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