325271381976670d 1325271395090348-tudent YouTube homeople e Engrade Netbook een On January 1, 2020. Pinnacle Corporation exchanged $3 424 500 cash for 100 percent of the outstanding voting stock of Strata Corporation on the acoustina Saad metown Dance Sheet $ Cash Accounts receivable Inventory Buildings in Licensing agreements Total 118.000 313.000 372 000 1970 000 3670 000 6243.000 Accounts payable Long termel Common stock Retained earrings S 3135000 1 500 000 120.000 5243 000 Total and equity Pinnacle prepared the following far-value allocation Fair value of Strata consideration transferred Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill indefinitele) 5 324 50 2730 000 60 $370.000 (120 000 25000 5 Al the acquisition date, Strata's buildings had a 10-year remaining and is losing agreements were due to expein 5 years on December 31.2021. Stats accounts payati dedan $85.600 currently owed to Pinnacle Strata Corporation continues to separate legal stence as a wholly owned subsidiary of Peace with independent accounting recorts Paracie employs the initial value method in its internal accounting for its investment Strata The separate financial statements for the two companies for the year ending December 312021 to Creditcances are indicated by parentheses Pinnacle Strate Sales 7178.000 (3.725.000 Cost of goods sold 4.720 000 2.125.000 Interest expense 262 000 247 000 Depreciation expense 656.000 432.000 Amortization expense 694,000 Dividend income (45000) Net Income $ $ Strata (3.725000) 2.125.000 247.000 432.000 694000 $ 3 Pinnacle (7.178.000) $ 4.720.000 262 000 656 000 45.000 (1 505,000) $ 152350005 (1585.000 500.000 (6320.000) 200.00 1 560 000 1.500.000 3424 500 5.720.000 Sales Cost of goods sold Interest expense Depreciation expense Amortization expense Dividend Income Net income Retained earnings 1/121 Net Income Dividends declared Retained Earnings 12/31/21 Cash Accounts receivable Inventory Investment in Strata Buildings (net) Licensing agreements Goodwill Total assets Accounts payable Long term debit Common stock Retained earnings 12/31/21 Total Liabilities and Owner's equity (227.000) 1.0.600) 227.000 45000 11685000) 300 000 335 000 1 270.000 5 2.098 000 2082 000 5 372 500 $ 12.842 500 5 15532500) 3 2 990 000 (3.000.000 16220 000) $ 12.842.500) 6.171.000 T500 (2.100.000 (1 500.000) 1626.000 (5.171.000) a. Prepare a worksheet to consolidate the financial information for these two companies b. Compute the following amounts that would appear on Pinnacles 2021 separate (nonconsolidated) financial records i Pinnacle's investment accounting was based on the equity method Subsidiary income Retained earnings, 1/1/21 Investment in Strata c. What effect does the parent's internat investment accounting method have on is consolidated financial statements? 11:23 AM re in the tabs below. 325271381976670d 1325271395090348-tudent YouTube homeople e Engrade Netbook een On January 1, 2020. Pinnacle Corporation exchanged $3 424 500 cash for 100 percent of the outstanding voting stock of Strata Corporation on the acoustina Saad metown Dance Sheet $ Cash Accounts receivable Inventory Buildings in Licensing agreements Total 118.000 313.000 372 000 1970 000 3670 000 6243.000 Accounts payable Long termel Common stock Retained earrings S 3135000 1 500 000 120.000 5243 000 Total and equity Pinnacle prepared the following far-value allocation Fair value of Strata consideration transferred Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill indefinitele) 5 324 50 2730 000 60 $370.000 (120 000 25000 5 Al the acquisition date, Strata's buildings had a 10-year remaining and is losing agreements were due to expein 5 years on December 31.2021. Stats accounts payati dedan $85.600 currently owed to Pinnacle Strata Corporation continues to separate legal stence as a wholly owned subsidiary of Peace with independent accounting recorts Paracie employs the initial value method in its internal accounting for its investment Strata The separate financial statements for the two companies for the year ending December 312021 to Creditcances are indicated by parentheses Pinnacle Strate Sales 7178.000 (3.725.000 Cost of goods sold 4.720 000 2.125.000 Interest expense 262 000 247 000 Depreciation expense 656.000 432.000 Amortization expense 694,000 Dividend income (45000) Net Income $ $ Strata (3.725000) 2.125.000 247.000 432.000 694000 $ 3 Pinnacle (7.178.000) $ 4.720.000 262 000 656 000 45.000 (1 505,000) $ 152350005 (1585.000 500.000 (6320.000) 200.00 1 560 000 1.500.000 3424 500 5.720.000 Sales Cost of goods sold Interest expense Depreciation expense Amortization expense Dividend Income Net income Retained earnings 1/121 Net Income Dividends declared Retained Earnings 12/31/21 Cash Accounts receivable Inventory Investment in Strata Buildings (net) Licensing agreements Goodwill Total assets Accounts payable Long term debit Common stock Retained earnings 12/31/21 Total Liabilities and Owner's equity (227.000) 1.0.600) 227.000 45000 11685000) 300 000 335 000 1 270.000 5 2.098 000 2082 000 5 372 500 $ 12.842 500 5 15532500) 3 2 990 000 (3.000.000 16220 000) $ 12.842.500) 6.171.000 T500 (2.100.000 (1 500.000) 1626.000 (5.171.000) a. Prepare a worksheet to consolidate the financial information for these two companies b. Compute the following amounts that would appear on Pinnacles 2021 separate (nonconsolidated) financial records i Pinnacle's investment accounting was based on the equity method Subsidiary income Retained earnings, 1/1/21 Investment in Strata c. What effect does the parent's internat investment accounting method have on is consolidated financial statements? 11:23 AM re in the tabs below