Commerce Corporation acquired all of the outstanding voting stock of Charles, Inc. on Janurary 1, 2021 in exchange for $5,000,000 in cash. Commerce intends to maintain Charles as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At the acquisition date, Charles' stockholders' equity was $3,000,000 including retained earnings of $1,700,000. At the acquisition date, Commerce prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred Mathias stockholders' equity-BV As of January 1, 2021 5,000,000 3,000,000 Excess fair value over book value 2,000,000 Equipment (5 yrs remaining) 500,000 Patents (10-year remaing life) 1,000,000 Total 1,500,000 Goodwill 500,000 Postacquisition, Commerce employs the (full) equity method to account for its investment in Charles. During the two years following the business combination, Charles reports the following income and dividends: 2021 2022 Income Dividends 680,000 760,000 40,000 50,000 No asset impairments have occurred since the acquisition date. Individual financial statements for each company as of December 31, 2022 are on the next sheet. REQUIED: 1) Prepare the consolidated journal entries as of December 31, 2022. 2) Complete the Consolidated Worksheet on the next tab for year end December 31, 2022. Account Commerce Charles Dr Ref Ref Cr Consolidated Sales Income Statement Cost of Goods Sold Depreciation Expense (7,000,000) (3,900,000) 4,300,000 2,700,000 775,000 277,000 Amortization Expense 410,000 103,000 Interest Expense 65,000 60,000 Equity earnings in Charles, Inc (560,000) 0 Net Income (2,010,000) (760,000) Statement of Retained Earnings Retained Earnings 1/1/2022 (4,940,000) (2,340,000) Net Income (2,010,000) (760,000) Dividends Paid 560,000 50,000 Retained Earnings 12/31/202:_ (6,390,000) (3,050,000) Balance Sheet Cash 75,000 143,000 Accounts Receivable 750,000 225,000 Inventory 1,700,000 785,000 Investment in Charles 5,950,000 0 Equipment, net 4,200,000 2,052,000 Patent 1,990,000 1,185,000 Unpatented Technology 725,000 1,450,000 Goodwill 425,000 0 Total Assets 15,815,000 5,840,000 Accounts Payable (225,000) (290,000) Long-Term Debt (1,000,000) (1,200,000) Common Stock - Commerce (8,200,000) Retained Earnings - Commerce (6,390,000) Common Stock - Charles (1,300,000) Retained Earnings - Charles (3,050,000) Total Liab & Stk Equity (15,815,000) (5,840,000)