“Axel Corporation acquires 100% of the stock of Wheal Company on December 31, Year 4. The following information pertains to Wheal Company on the date…

“Axel Corporation acquires 100% of the stock of Wheal Company on December 31, Year 4. Thefollowing information pertains to Wheal Company on the date of acquisition:Book Value Fair ValueCash………………………………………………… $ 40,000 $ 40,000Accounts receivable……………………………. 60,000 55,000Inventory…………………………………………… 50,000 75,000Property, plant, and equipment (net)…….. 100,000 200,000Secret formula (patent) ………………………. — 30,000Total assets ………………………………………. $250,000 $400,000Accounts payable ………………………………. $ 30,000 $ 30,000Accrued employee pensions…………………. 20,000 22,000Long-term debt………………………………….. 40,000 38,000Capital stock …………………………………….. 100,000 —Other contributed capital ……………………. 25,000 —Retained earnings ……………………………… 35,000 —Total liabilities and equity …………………… $250,000 $ 90,000Axel Corporation issues $110,000 par value ($350,000 market value on December 31, Year 4) ofits own stock to the shareholders of Wheal Company to consummate the transaction, and WhealCompany becomes a wholly owned, consolidated subsidiary of Axel Corporation.Required:a. Prepare journal entries for Axel Corp. to record the acquisition of Wheal Company stock assuming (1) poolingaccounting and (2) purchase accounting.b. Prepare the worksheet entries for Axel Corp. to eliminate the investment in Wheal Company stock in preparationfor a consolidated balance sheet at December 31, Year 4 assuming (1) pooling accounting and (2) purchaseaccounting.c. Calculate consolidated retained earnings at December 31, Year 4 (Axel’s retained earnings at this date are$150,000), assuming:(1) Axel Corp. uses the pooling method for this business combination.(2) Axel Corp. uses the purchase method for acquisition of Wheal Company.CHECK(b) Cr. Investment inWheal for $110,000 in (1),and $350,000 total in (2)” My deadline is tonight but I knwo you cant get it done tonight. So please let me know if you will be able to get this done by tomorrow night. Thanks!

“Axel Corporation acquires 100% of the stock of Wheal Company on December 31, Year 4.Thefollowing information pertains to Wheal Company on the date of acquisition: Book Value Fair Value…

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