Investment in Sherman 2,980 Merger expenses 40 Cash 2,790 Gain on acquisition 230 Calculation of gain on acquisition: Fair value of Sherman = $2,500 + $100 + $100 + $250 + $30 = $2,980 $2,980 – $2,750 = $230 gain b. Consolidation working paper elimination entries: (E) Stockholders’ equity–Sherman 2,500 Investment in Sherman 2,500 (R) Inventories 100 Land 100 Other plant assets, net 250 Long-term debt 30 Investment in Sherman 480 Note: Acquisition costs are expensed separately…
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