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On January 1, 2017, Travers Company acquired 90 percent of Yarrow Company's outstanding stock for $891,000. The 10 percent noncontrolling interest had an assessed fair value of $99,000 on that date. Any acquisition-date excess fair value over book value was attributed to an unrecorded customer list developed by Yarrow with a remaining life of 15 years. On the same date, Yarrow acquired an 80 percent interest in Stookey Company for $496,000. At the acquisition date, the 20 percent noncontrolling interest fair value was $124,000. Any excess fair value was attributed to a fully amortized copyright that had a remaining life of 10 years. Although both investments are accounted for using the initial value method, neither Yarrow nor Stookey have distributed dividends since the acquisition date. Travers has a policy to declare and pay cash dividends each year equal to 40 percent of its separate company operating earnings. Reported income totals for 2017 follow: Travers Company Yarrow Company Stookey Company $ 490,000 255,000 196,000 Following are the 2018 financial statements for these three companies. Stookey has transferred numerous amounts of inventory to Yarrow since the takeover amounting to $118,000 (2017) and $147,500 (2018). These transactions include the same markup applicable to Stookey's outside sales. In each year, Yarrow carried 20 percent of this inventory into the succeeding year before disposing of it. An effective tax rate of 40 percent is applicable to all companies. All dividend declarations are paid in the same period. Sales Cost of goods sold Operating expenses Net income Retained earnings, 1/1/18 Net Income (above) Dividends declared Retained earnings, 12/31/18 Current assets Investment in Yarrow Company Investment in Stookey Company Land, buildings, and equipment (net) Total assets Travers Company $(1,090,000) 580,700 120.900 5 (388,400) $ (890,000) (388,460) 155,360 $(1,123, 040) $ 559,900 891,000 Yarrow Company $ (746,300) 397,900 99,000 $ (249,400) $ (748,280) (249, 400) Stookey Company $ (538,000) 322,800 107,600 $ (107,600) $ (471, 000) (107,600) @ $ (578,600) $ 382,700 e $ (997,600) $ 473, 100 @ 496,000 874,000 $ 1,843, 100 1,175, 100 $ 2,626,000 508,500 $ 891,300 $ $ (748,280) (249,400) $ (997,600) $ 473, 100 $ (471,800) (197,600) 0 $ (578,600) $ 382,700 $ Retained earnings, 1/1/18 Net incone (above) Dividends declared Retained earnings, 12/31/18 Current assets Investment in Yarrow Company Investment in Stockey Company Land, buildings, and equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/18 Total liabilities and equities (890,000) (388,400) 155, 360 $(1,123,040) 559,900 891,000 0 1,175, 100 $ 2,626,000 $(1,892,960) (500,000) (1, 123,040) $(2,626,000) 496, eee 874,000 $ 1,843, 100 $ (522,780) (322,uee) (997,680) $(1,843, 100) 508,600 $ 891,300 $ (112,700) (200,000) (578,600) $ (891,300) Note: Parentheses Indicate a credit balance, a. Prepare the business combination's 2018 consolidation worksheet; ignore income tax effects. b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018 c. Determine the amount of Stookey's income tax on a separate tax return for 2018. d. Based on the answers to requirements () and (c), what journal entry does this combination make to record 2018 income tax? Complete this question by entering your answers in the tabs below. Reg Red Band Reg D Prepare the business combination's 2015 consolidation worksheet; ignore income tax effects. (For accounts where multiple consolidation entries are required, com all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and credit columns should be entered as positive. Negative amounts for the Noncontrolling In and Consolidated Totals columns should be entered with a minus sign. Round your answers to nearest whole dollar amount. ) Show les Complete this question by entering your answers in the tabs below. Reg A Req B and C ReqD Based on the answers to requirements (b) and (c), what journal entry does this combination make to record 2018 income tax? (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit Deferred income tax-Asset 944 Income tax expenseCurrent 286,776 Income tax payable 287,720 1 Complete this question by entering your answers in the tabs below. Reg A Req B and C ReqD Based on the answers to requirements (b) and (c), what journal entry does this combination make to record 2018 income tax? (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit Deferred income tax-Asset 944 Income tax expenseCurrent 286,776 Income tax payable 287,720 1