Can you answer this questions for me?
5. On January 1, 2013, Peterson Corporation exchanged $1,177,000 fair-value consideration for all of the outstanding voting stock of Santiago, Inc. At the acquisition date, Santiago had a book value equal to $1,100,000. Santiago's individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $252,000 with an estimated remaining life of six years. The Santiago acquisition was Peterson's only business combination for the year. In case expected synergies did not materialize, Peterson Corporation wished to prepare for a potential future spin-off of Santiago, Inc. Therefore, Peterson had Santiago maintain its separate incorporation and independent accounting information system as elements of \\continuing value. On December 31, 2013, each company submitted the following financial statements for consolidation. Peterson Corp. Income Statement Revenues Cost of goods sold Gain on bargain purchase Depreciat ion and amortizatio n Equity earnings from Santiago Net income Statemen t of Retained Earnings Retained earnings, 1/1 Net income (above) Dividends paid Retaine d earnings, 12/31 Santiago, Inc. $ (658,000) $ 225,000 242,000 (175,000) 0 149,000 158,000 (176,000) $ (618,000) 0 (635,000) $ (218,000) $ (1,825,000) $ (800,000) (635,000) (218,000) 250,000 30,000 $ (2,210,000) $ (988,000) Balance Sheet Current assets Investme nt in Santiago Trademar ks Patented technology Equipmen t $ 220,000 $ 394,000 Liabilities Common stock Retained earnings, 12/31 Total liabilities and equity 0 170,000 254,000 376,000 447,000 668,000 320,000 $ 2,932,000 Total assets 1,498,000 $ 1,415,000 $ $ (187,000) (127,000) (535,000) (300,000) (2,210,000) (988,000) $ (2,932,000) $ (1,415,000) Note: Parentheses indicate a credit balance a. How Peterson determined the following account balances. (Credit balances should be indicated by a minus sign.) Gain on bargain purchase Earnings from Santiago Investment in Santiago $ $ $ B. Prepare a December 31, 2013, consolidated worksheet for Peterson and Santiago. (Leave no cells blank - be certain to enter "0" wherever required. Enter consolidation entries for investment in Santiago Company in the order of (I) Elimination of parent's equity in subsidiary's income, (S) Elimination of subsidiary's stockholders' equity, (A) Allocation of subsidiary's acquisition-date excess fair values over book values. Input all amounts as positive values except for the credit balances which should be entered with the minus sign.) PETERSON AND SANTIAGO Consolidation Worksheet For Year Ending December 31, 2011 Consolidation Entries Consolidated Debi t Accounts Peterson Revenues (658,000) (618,000) Cost of Goods Sold 225,000 242,000 Gain on Bargain Pur (175,000) 0 Depreciation & Amotization 149,000 158,000 Equity Earned by Santiago (176,000) 0 Net Income (635,000) (218,000) Retained Earnings Retained Earnings 1/1 (1,825,000) Net Income (635,000) Dividends Paid 250,000 Retained Earnings 12/31 (2,210,000) Balance Sheet Current Assets 220,000 Investment in Santiago 1,498,000 Trademarks 170,000 Patent Techn 376,000 Equipment 668,000 Total Assets 2,932,000 Liabilities (187,000) Common Stock (535,000) Retained Earnings 12/31 (2,210,000) Total liabilities & Equity (2,932,000) (800,000) (218,000) 30,000 (988,000) 394,000 0 254,000 447,000 320,000 1,415,000 (127,000) (300,000) (988,000) (1,415,000) Santiago Credit Consolidated Totals
