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0 Question Two (20 marks) Al Noor acquired 100% of Al Manar's Common Stock on 16 of January 2017 for cash. On that date, Al

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0 Question Two (20 marks) Al Noor acquired 100% of Al Manar's Common Stock on 16 of January 2017 for cash. On that date, Al Manar had land that was undervalued by $10,000 and Building and Equipment, with a remaining useful life of 5 years, that was undervalued by $35,000. During 2017, Al Manar reported a net income of $75,000 and declared and paid dividends of $20,000. Al Manar Corp's Common Stock remained unchanged since the acquisition. Al Noor used the initial value method to account for the investment in Al Manar. The below trial balance summarized the financial position at December 31, 2018 of both companies: Al Noor Al Manar Account Debit Credit Debit Credit Cash $230,000 $75,000 Accounts Receivable 190,000 80,000 Inventory 180,000 100,000 Investment in Al Manar Stock 355,000 Land 200,000 100,000 Buildings & Equipment 700,000 200,000 Cost of Goods Sold 270,000 150,000 Depreciation Expense 50,000 10,000 Selling & Administrative Expense 230,000 60,000 Dividends Declared 225,000 30,000 Accumulated Depreciation $500,000 $30,000 Accounts Payable 75,000 35,000 Bonds Payable 150,000 85,000 Common Stock 500,000 200,000 Retained Earnings (January 1, 2018) 525,000 155,000 Sales 850,000 300,000 Dividends income 30.000 g Total $2.630.000 $2.630.000 $8O5.000 $805.000 Required: 1. Prepare the necessary journal entry to record the acquisition transaction on January 1, 2017. 2. Assume that Al Noor discovered that they were supposed to apply the Partial Equity method NOT the Initial Value method to account for the investment in Al Manar. Prepare the consolidation worksheet (in proper format) for the year ended December 31, 2018 using the partial equity method. Show all details including consolidated totals (Hint, you may consider adjusting some of the accounts in the trial balance above if needed)

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