Big Company acquired all the outstanding stocks of Small Corporation on April 1, 2014, for $15,000,000, when Smalls stockholder equity consisted of $5,000,000 capital stock and $2,000,000 retained earnings. The price reflected a $500,000 undervaluation of Smalls inventory (sold in 2014) and a $3,500,000 undervaluation of Smalls buildings (remaining useful life seven years).

During 2015, Small sold a land that cost $1,000,000 to Big for $1,500,000. Big resold the land for $2,200,000 during 2018.

Big sells inventory to Small on a regular basis, as follows (in thousands):

Sales to Small Cost to Big % unsold by Small

a t year end % unpaid by

Small at year-end

2014 500 300 0 0 2015 1,000 600 30 50

2016 1,200 720 18 40 2017 1,000 600 25 30

2018 1,500 900 20 20

Small sold equipment with a book value of $800,000 to Big on January 1, 2018, for $1,600,000. This equipment had a remaining useful life of four years at the time of the sale.Big uses the equity method to account for its investment in Small. The financial statements for Big and Small are summarized as follows (in thousands):Combined Income and Retained earnings Statement for the year ended December 31, 2018

Sales		Big 26,000	Small 11,000
Gain on l and		700
Gain on equipment Income from Small		1,380	800
Cost of Sales		(15,000)	(5,000)
Depreciation expense		(3,700)	(2,000)
Other Expenses (4,280) (2,800)
	Net Income	5,100	2,000
Add: Beginning R/E		12,375	4,000
Deduct: Dividends		(3,000)	(1,000)

R/E December 31 14,475 5,000

Balance Sheet a t December 31, 2018
			Big	Small
Cash			1,170	500
A/R, net			2,000	1,500
Inventories			5,000	2,000
Land			4,000	1,000
Buildings, net			15,000	4,000
Equipment, net			10,000	4,000
Investment in Small			14,405

Required:Determine the schedule of amortization of ECOBV for the years 2014 to 2018

1. Reconstruct the balance for the account Investment in Small at December 31, 2018. Use the T-account to present the calculations
2. Reconstruct the balance of the account Income from Small for the year 2018. Use the T- account to present the calculations
3. Prepare consolidation adjustment entries
4. Complete a consolidated worksheet for Big Company and its subsidiary Small Company as of December 31, 2018. Use the format provided on the next page (You can write your own Excel worksheet, but with the indicated format)