Canan Corporation paid $14,400 for a 30 interest in Kodak Corporation on January 1, 2020, when Kodak's stockholders' equity consisted of $8,000 Capital Stock APIC of 52,000 and $3,000 of Retained Earnings. The excess cost over book value was attributable to trademark, which has not been impaired since acquisition date Additional information: 1. Canan sells merchandise to Kodak at 120% of Canan's cost. During 2020, Canan's sales to Kodak were 54,800, of which half of the merchandise remained in Kodak's inventory at December 31, 2020. (The 2020 ending Inventory was sold in 2021.) During 2021, Cana's sales to Kodak were $6,000 of which remained in Kodak's inventory at December 31, 2021 At year end 2021. Kodak owed Canan $4,000 for the inventory purchased during 2021 2. Canan Corporation sold equiment with a book value of $2,000 and a remaining useful life of four years and no salvage value to Kodak Corporation on January 1, 2021 for $3,800 Straight line depreciation is used 3. During 2021, Kodak sold to Canan land for 550,000 that had a book value of $20,000. Canan still owns the land at 12/31/21 Separate company financial statements for Canan Corporation and Kodak at December 31, 2021 are summarized in the first two columns of the consolidation working papers. See Spreadsheet Tab D E INCOME STATEMENT F P CONS. TOT S EUMINATIONS Dr Cr 14,000 Sales Equity in sub earnings gain on sale of equip Galn on sale of land Total revenues 60,000 4,000 800 74,000 4,000 800 30,000 108,800 30,000 44,000 64.800 Cost of goods sold Expenses 26,000 28,000 4,400 3,600 30,400 31,600 2 Total expenses 3 Total Net Income Less net Income to NCI Net Income to controlling Interest 54,000 10,800 8,000 36,000 62,000 46,800 0 46,800 10,800 36,000 RETAINED EARNINGS STATEMENT 2 Retained Earnings 1/1 3 7.833 5.000 12,833 Net Income 5 5 Dividends declared 10,800 36,000 46,800 7,000 2,000 9,000 B Retained Earnings 12/31 11,633 39,000 50,633 BALANCE SHEET 3 cash o acets rec 5,500 33,000 BALANCE SHEET ash 5,500 7,133 33,000 4,000 10,000 4,500 cets rec Olvidends rec riventory other current assets and Buildings, net Equipment, net nvestment in s trademk 38,500 11,133 0 14,500 0 53,500 0 33,000 18,000 0 50,000 3,500 9,000 24,000 18,000 0 Total assets 114,633 0 168,633 54,000 53,000 5,000 58,000 0 Accounts payable Dividends payable Other liabilities Common stock Additional Pald-in capital Retained earnings noncontrolling interest Total liabilities and equity 50,000 8,000 2,000 39.000 o 58,000 2,000 50,633 11,633 114,633 TRUE 54.000 TRUE 0 168,633 TRUE 1. Prepare the acquisition analysis as of acquisition date. Compute the unamortized differential as of 1/1/2021. 2. Analyze each intercompany transaction. Label as either upstream downstream 3. SEPARATELY Calculate Net income to the controlling interest for the year 2021 4. Verify the calculation of the balance in the acccount equity in sub earnings and record the parent company entries with respect to its investment during 2021 5. Prepare all elimination entries for 2021 6. Complete the consolidating spreadsheet for the year ended 2021. Canan Corporation paid $14,400 for a 30 interest in Kodak Corporation on January 1, 2020, when Kodak's stockholders' equity consisted of $8,000 Capital Stock APIC of 52,000 and $3,000 of Retained Earnings. The excess cost over book value was attributable to trademark, which has not been impaired since acquisition date Additional information: 1. Canan sells merchandise to Kodak at 120% of Canan's cost. During 2020, Canan's sales to Kodak were 54,800, of which half of the merchandise remained in Kodak's inventory at December 31, 2020. (The 2020 ending Inventory was sold in 2021.) During 2021, Cana's sales to Kodak were $6,000 of which remained in Kodak's inventory at December 31, 2021 At year end 2021. Kodak owed Canan $4,000 for the inventory purchased during 2021 2. Canan Corporation sold equiment with a book value of $2,000 and a remaining useful life of four years and no salvage value to Kodak Corporation on January 1, 2021 for $3,800 Straight line depreciation is used 3. During 2021, Kodak sold to Canan land for 550,000 that had a book value of $20,000. Canan still owns the land at 12/31/21 Separate company financial statements for Canan Corporation and Kodak at December 31, 2021 are summarized in the first two columns of the consolidation working papers. See Spreadsheet Tab D E INCOME STATEMENT F P CONS. TOT S EUMINATIONS Dr Cr 14,000 Sales Equity in sub earnings gain on sale of equip Galn on sale of land Total revenues 60,000 4,000 800 74,000 4,000 800 30,000 108,800 30,000 44,000 64.800 Cost of goods sold Expenses 26,000 28,000 4,400 3,600 30,400 31,600 2 Total expenses 3 Total Net Income Less net Income to NCI Net Income to controlling Interest 54,000 10,800 8,000 36,000 62,000 46,800 0 46,800 10,800 36,000 RETAINED EARNINGS STATEMENT 2 Retained Earnings 1/1 3 7.833 5.000 12,833 Net Income 5 5 Dividends declared 10,800 36,000 46,800 7,000 2,000 9,000 B Retained Earnings 12/31 11,633 39,000 50,633 BALANCE SHEET 3 cash o acets rec 5,500 33,000 BALANCE SHEET ash 5,500 7,133 33,000 4,000 10,000 4,500 cets rec Olvidends rec riventory other current assets and Buildings, net Equipment, net nvestment in s trademk 38,500 11,133 0 14,500 0 53,500 0 33,000 18,000 0 50,000 3,500 9,000 24,000 18,000 0 Total assets 114,633 0 168,633 54,000 53,000 5,000 58,000 0 Accounts payable Dividends payable Other liabilities Common stock Additional Pald-in capital Retained earnings noncontrolling interest Total liabilities and equity 50,000 8,000 2,000 39.000 o 58,000 2,000 50,633 11,633 114,633 TRUE 54.000 TRUE 0 168,633 TRUE 1. Prepare the acquisition analysis as of acquisition date. Compute the unamortized differential as of 1/1/2021. 2. Analyze each intercompany transaction. Label as either upstream downstream 3. SEPARATELY Calculate Net income to the controlling interest for the year 2021 4. Verify the calculation of the balance in the acccount equity in sub earnings and record the parent company entries with respect to its investment during 2021 5. Prepare all elimination entries for 2021 6. Complete the consolidating spreadsheet for the year ended 2021