Answers are provided on the question paper. Please explain detailed and clearly how those numbers come from? Especially for those bond, building, inventory calculations. How to solve this type of questions? Equity method

ey uty method ABC Inc. acquired 25% of the voting shares of XYZ Corp. for $300,000 on December 31, 2013. The investment provided ABC with significant influence. At the time of the acquisition, XYZ had shareholders equity of $600,000 of which $400,000 was retained earnings. Based on due diligence, ABC ascribed the following fair values to the assets and liabilities of the acquired company. alue Book value Fair value 29% ISv. Inventory fair vale allocetion Land Iesertery CoPatent S300,000 200,000 50,000 300,000 420,000 $200,000 400,000 200,000 500,000 600,000 Clos)Building Bond payable lank ci-ay bildky 2oo The patent has 3 years until it expires, the building is depreciated on a straight line basis a> hoad in 3 years with an estimated 10 year useful life with no residual value and the bond payable matures 25 % In 2014, XYZ reported iet income of $600,000 and paid a dividend of $300,000. Further, in 2014 it has been determined that goodwil!has been impaired by 50%. REQUIRED Prepare the journal entry to record the acquisition and any entries required for 2014. I ne+ incne (25%) Inestee earis 6000d I n vestment income So Invest ment in asn In ventary re wld 20443 )- C pureivie shares) as Jood wrtl 725 Cash 7 dividend Paul 25%)