A) What are some reasons for the purchase price being in excess of the carrying value of the acquiree's assets and liabilities? What does this say about the accuracy of the values used in the financial statements of the acquiree? (3 marks) B) Under the entity theory (FVE method), the fair value of the non-controlling interest may be determined by inference. (3 marks) 1) Describe how the fair value of the non-controlling interest is determined by inference when an acquirer purchases 80% of an acquiree's common shares for $80,000. 2) Describe the shortcomings of the entity theory when the fair value of the non-controlling interest is determined by inference. On January 1, 2020 Point Reyes Corporation acquired a 45% ownership interest in Sunshine Company fo S500,000 The controller is now preparing his first set of financial statements since the acquisition and is unsure about which method of reporting is most appropriate for the investment. He has come to you for advice. REQUIRED: A) State under what conditions it would be appropriate for Point Reyes to prepare consolidated financial statements to report the investment in Sunshine. As part of your answer, briefly describe the extent of influence implied by the use of consolidation and state 2 factors that might indicate that this extent of influence does exist. (3 marks) B) State under what conditions it would be appropriate for Point Reyes to report the investment in Sunshine using the equity method. As part of your answer, briefly describe the extent of influence implied by the use of the equity method and state 2 factors that might indicate that this extent of influence does exist. (3 marks) State under what conditions it would be appropriate for Point Reyes to report the investment in Sunshine using proportionate consolidation (Proprietary Theory). As part of your answer, identify the extent of influence implied by the use of proportionate consolidation. (2 marks)