3. The following are preliminary financial statements for Choco Co. and Cake Co. for the year ending December 31, 2020 prior to Choco's acquisition of Cake. Choco Co. Cake Co. Book Values Book Values Fair Values Cash and Receivable 120,000 30,000 30,000 Inventories 240,000 90,000 94,000 Land 120,000 108,000 128,000 Building 480,000 336,000 348,000 Accounts payable (70,000) (100.000) (100,000) Long-term debt (38,000) (32,000) (34,000) Common stock (192,000) (72,000) Additional paid in capital (96,000) (12,000) Retained earnings 12/31/20 (564,000) (348.000 Revenues (360,000) (228,000) Expenses 240,000 132.000 On 12/31/2020 Choco exchanged 20,000 shares of its $4 par value common stock for all the outstanding shares of Cake Choco's stock on that date has a fair value (-market price) of $30 per share. Assume these two companies retained their separate legal identities. 5) Prepare consolidation Entry A on 12/31/20. (3 points) Account name Debit Credit 6) Prepare a consolidation worksheet to prepare Balance sheet as of December 31, 2020 after the acquisition transaction is completed. Must complete (1)-(17) (17 pts) and post consolidation entries S and A (4.5pts) for full credits. (21.5 points) Balance Sheet Choco Cake Consolidated Entries (4.5pts) Consolidated Totals Credit Cash and receivable $30.000 (7) Inventory 240,000 90,000 (8) Investment in Cake (2) (9) Debit 0 Land 120,000 108.000 (10) Building 480,000 336,000 (11) Goodwill 0 0 (12) Total assets (3) (13) Accounts payable (170,000 (70,000) (38,000) Long-term debt $564,000 (100,000) (32,000) (72.000) (12,000) (14) Common stock (4) (15) (5) (16) Additional paid in capital Retained earnings 12/31 Total liabilities and equity (6) (348,000) (17) (3) $(564,000) (13) (1)