2. On January 1, 2019, P Corporation paid $1,090,000 for all of the outstanding voting stock of S Inc. At the date of acquisition, Shad a book value equal to $950,000. S's individual assets and liabilities had fair values equal to their book values except for the patent account, which was undervalued by S40,000 with an estimated remaining life of eight years. On December 31, 2019 each company submitted the following financial statements for consolidation Income Statement P Corp. S Inc. Revenues Cost of goods sold Other Rev. & Gains Depreciation Equity earnings from S 535,000 (210,000) 100,000 (125,000) 200,000 495,000 (155,000) 0 (140,000) Net Income 500,000 200,000 Statement of Ret. Earnings Retained Earnings, 1/1 Net Income (above) Dividends paid 1,500,000 500,000 (200,000) 650,000 200,000 (50,000) Retained Earnings. 31/12 1,800,000 800,000 Balance Sheet Current Assets Investment in S Trademarks Patent Equipment 190,000 1,300,000 100,000 300,000 610,000 300,000 0 200.000 400.000 300.000 Total assets 2,500,000 1,200,000 Liabilities Common stock Retained earnings, 31/12 165,000 535,000 1,800,000 100.000 300,000 800,000 Total liabilities and equity 2,500,000 1,200,000 Prepare necessary journal entries and consolidated worksheet using equity method. 2. On January 1, 2019, P Corporation paid $1,090,000 for all of the outstanding voting stock of S Inc. At the date of acquisition, Shad a book value equal to $950,000. S's individual assets and liabilities had fair values equal to their book values except for the patent account, which was undervalued by S40,000 with an estimated remaining life of eight years. On December 31, 2019 each company submitted the following financial statements for consolidation Income Statement P Corp. S Inc. Revenues Cost of goods sold Other Rev. & Gains Depreciation Equity earnings from S 535,000 (210,000) 100,000 (125,000) 200,000 495,000 (155,000) 0 (140,000) Net Income 500,000 200,000 Statement of Ret. Earnings Retained Earnings, 1/1 Net Income (above) Dividends paid 1,500,000 500,000 (200,000) 650,000 200,000 (50,000) Retained Earnings. 31/12 1,800,000 800,000 Balance Sheet Current Assets Investment in S Trademarks Patent Equipment 190,000 1,300,000 100,000 300,000 610,000 300,000 0 200.000 400.000 300.000 Total assets 2,500,000 1,200,000 Liabilities Common stock Retained earnings, 31/12 165,000 535,000 1,800,000 100.000 300,000 800,000 Total liabilities and equity 2,500,000 1,200,000 Prepare necessary journal entries and consolidated worksheet using equity method