On January 1, 2019, Usselo Corporation exchanged € 1,710,000 cash for 90 percent of the outstanding voting stock of Tweckelo Company. The consideration transferred by Usselo provided a reasonable basis for assessing the total January 1, 2019, fair value of Tweckelo Company. At the acquisition date, Tweckelo reported the following owners’ equity amounts in its balance sheet:

Common stock € 400,000

Additional paid-in capital € 60,000

Retained earnings € 265,000

In determining its acquisition offer, Usselo noted that the values for Tweckelo’s recorded assets and liabilities approximated their fair values. Usselo also observed that Tweckelo had developed internally a customer base with an assessed fair value of € 800,000 that was not reflected on Tweckelo’s books. Usselo

expected both cost and revenue synergies from the combination.

At the acquisition date, Usselo prepared the following fair-value allocation schedule:

Fair value of Tweckelo Company € 1,900,000

Book value of Tweckelo Company € 725,000

Excess fair value € 1,175,000

to customer base (10-year remaining life) € 800,000

to goodwill € 375,000

At December 31, 2020, the two companies report the following balances:

Usselo €		Tweckelo €
Revenues		-1,843,000		-675,000
Cost of goods sold		1,100,000		322,000
Depreciation expense		125,000		120,000
Amortization expense		275,000		11,000
Interest expense		27,500		7,000
Equity in income of Tweckelo		-121,500		-
Net income		-437,000		-215,000
Retained earnings, 1/1		-2,625,000		-395,000
Net income		-437,000		-215,000
Dividends declared		350,000		25,000
Retained earnings, 12/31		-2,712,000		-585,000
Current assets		1,204,000		430,000
Investment in Tweckelo		1,854,000		-
Buildings and equipment		931,000		863,000
Copyrights		950,000		107,000
Accounts payable		-485,000		-200,000
Notes payable		-542,000		-155,000
Common stock		-900,000		-400,000
Additional paid-in capital		-300,000		-60,000
Retained earnings, 12/31		-2,712,000		-585,000
Total of assets minus liabilities and equity	0		0
	During 2019 and 2020 there were no intra-entity sales. At year-end, there were no intra-entity receivables or payables. 1. Determine the amounts in the consolidated balance sheet and the consolidated income statement for this business combination as of December 31, 2020. 2. If instead the noncontrolling interest’s acquisition-date fair value is assessed at € 165,000, what changes would be evident in the consolidated statements?