Plum Corporation acquired all the stock of Sudbury Company, at an acquisition cost of $600 million. Sudbury's book value at the date of acquisition was $100 million. Sudbury's assets and liabilities are carried at amounts approximating fair value, except its equipment is overvalued by $225 million, its long-term debt is overvalued by $30 million, and its trademarks are undervalued by $80 million. Sudbury has no previously unreported identifiable intangible assets.
Required
Prepare consolidation eliminating entries (E) and (R) at the date of acquisition.

Question

Quizplus · Accepted Answer

The Answer of Plum Corporation acquired all the stock of Sudbury Company, at an acquisition cost of $600 million. Sudbury's book value at the date of acquisition was $100 million. Sudbury's assets and liabilities are carried at amounts approximating fair value, except its equipment is overvalued by $225 million, its long-term debt is overvalued by $30 million, and its trademarks are undervalued by $80 million. Sudbury has no previously unreported identifiable intangible assets.
Required
Prepare consolidation eliminating entries (E) and (R) at the date of acquisition.

Plum Corporation Acquired All the Stock of Sudbury Company, at an Acquisition