Reference no: EM132158374

Question - Pierce Corporation acquires all the voting stock of Stick Company for $100 million in cash. Stick's equity accounts at the date of acquisition total $20 million, consisting of the following:

Capital stock - $5 million

Retained earnings - 15 million

Stick's assets and liabilities are reported at amounts approximating fair value, except its plant assets are undervalued by $8 million. It has no unreported identifiable intangible assets.

Required - Prepare eliminating entries (E) and (R) for the consolidation working paper at the date of acquisition.