1.(37 points) Below are the balance sheets of Big and Small at 01/01/2015 right before Big bought 100% of company Small's shares and make Small its subsidiary.

BIG Small

Book Value Market Value Consolidated

Cash 25,000,000 5,000,000 5,000,000 ?

Account Receivable 30,000,000 5,000,000 5,000,000 ?

Inventory 50,000,000 7,000,000 7,000,000 ?

Land 100,000,000 10,000,000 20,000,000 ?

PPE 70,000,000 50,000,000 30,000,000 ?

Patent 35,000,000 10,000,000 30,000,000 ?

Goodwill ? ?

Total assets 310,000,000 87,000,000 97,000,000 ?

Liabilities (150,000,000) (85,000,000) (85,000,000) ?

Common Stock (2,000,000) (300,000) ?

ADPC (78,000,000) (1,000,000) ?

Retained Earnings (80,000,000) (700,000) ?

Total liabilities and equity(310,000,000) (87,000,00) ?

Note that Big spent $20,000,000 for 100% shares of company small. PPE at 01/01/2015 had 4 years of useful life left while Patent of Small at 01/01/2015 had 10 years of useful life left.

a.What are the journal entries for big to record the investing action. What are the journal entries for Small to record such activities? (6 points)