On January 1, 2023, Palo Verde Corporation acquired 100 percent of the voting stock of Silverstone Corporation in exchange for $2,030,000 in cash and securities. On the acquisition date, Silverstone had the following balance sheet:

At the acquisition date, the book values of Silverstone’s assets and liabilities were generally equivalent to their fair values except for the following assets:

During the next two years, Silverstone has the following income and dividends in its own separately prepared financial reports to its parent.

Dividends are declared and paid in the same period. The December 31, 2024, separate financial statements for each company follow. Parentheses indicate credit balances.

a. Prepare Palo Verde’s acquisition-date fair-value allocation schedule for its investment in Silverstone.

b. Show how Palo Verde determined its December 31, 2024, Investment in Silverstone balance.

c. Prepare a worksheet to determine the balances for Palo Verde’s December 31, 2024, consolidated financial statements.

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Cash Accounts receivable Inventory Equipment (net) Trademarks $ 23,000 97,000 140,000 1,490,000 850,000 $2,600,000 Accounts payable Common stock Retained earnings $1,050,000 800,000 750,000 $2,600,000