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Consolidating Eliminating Entries, Date of Acquisition: U.S. GAAP and IFRS

Plummer Corporation acquired 90 percent of Softek Technologies voting stock by issuing 200,000 shares of $1 par common stock with a fair value of $100,000,000. In addition, Plummer paid $2,000,000 in cash to the consultants and accountants who advised in the acquisition. Softeks shareholders equity at the date of acquisition is as follows:

Common stock	$400,000
Additional paid-in capital	20,000,000
Retained deficit	(10,000,000)
Accumulated other comprehensive loss	(1,000,000)
Treasury stock	(500,000)
Total	$8,900,000

Softek's assets and liabilities were carried at fair value except as noted below:

	Book Value	Fair Value
Plant assets, net	$12,000,000	$6,000,000
Trademarks	--	2,000,000
Customer lists	--	3,000,000

The fair value of the noncontrolling interest is estimated to be $9,000,000 at the date of acquisition.

(b) Prepare the working paper consolidation eliminating entries at the date of acquisition, following IFRS and the alternative valuation method for noncontrolling interests. Enter all your answers in thousands, round to the nearest thousand, when appropriate. Consolidation Journal Description Debit Credit (E) Common stock Additional paid-in capital Retained deficit Accumulated OCL Treasury stock Investment in Softek Noncontrolling interest in Softek (R) Trademarks Customer lists Goodwill Noncontrolling interest in Softek Plant assets, net Investment in Softek 400 20,000 0 0 0 0 0 2,000 3,000 10,110 x 81,100 x 0 0 0 0 10,000 1,000 500 8,010 890 0 0 0 0 101,100 x 6,000 x

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