Consolidations Review Problem Due on Monday, April $29,2024$ at $10$:$00$ am on Canvas. All parts must be neatly typed.

May purchased $70\%$ of the outstanding common stock of Gardens on $1/1/19$ for $$18\mathrm{.}0$ million in cash. Gardens reported the following income and dividends for $2019$ and $2020($in $000\text{'}$s$)$:

$\backslash$table$[[,2019,2020],[$Net Income,$1,000,4,000],[$Dividends$,300,1,500]]$

The following are the fair value$/$book value amounts for Gardens on $1/1/19($in $000\text{'}$s$)$:

$\backslash$table$[[,$Book Value,Fair Values$],[$Cash$,600,600],[$Receivables$,700,700],[$Notes Receivable,$1,000,???],[$Inventory $($FIFO$),1,200,1,300],[,,12,000],[$Plant & Equipment,$10,000,5,000],[$Less: Accumulated Deprn.,$4,000,],[$Patent$,,149\mathrm{.}938],[,,1,327\mathrm{.}029],[,149\mathrm{.}938,],[$Accounts Payable,$1,071\mathrm{.}062,],[$Bond Payable,$5400,],[$Common stock,$2929,],[$Retained Earnings,,$],[,,],[,,],[,,]]$

The amounts below are not list in $000\text{'}$s but the full number is used.

The $$1,000,000$ face bond pays interest semi$-$annually on $\frac{6}{30}$ and $\frac{12}{31}.$ On $\frac{1}{1}\frac{?}{19},$ the bond had $10$ years until maturity. The bond was originally issued when the market rate was $7\%$ with a coupon rate of $8\%.$

The plant & equipment had remaining useful lives of $10$ years at $1/1/19$ and the patent has a $5-$year useful life at $\frac{1}{1}\frac{?}{19}.$

The estimated fair value of anticipated operating synergies is $$500,000$ on $\frac{1}{1}\frac{?}{19}.$ On average the synergy impact on income should be equally over the next $5$ years. workf

The estimated fair value of a Gardens trademark is $$2,000,000.$ Its estimated life is $8$ years.

The Notes Receivable terms are $$1,000,000$ due in $5$ years from $\frac{1}{1}\frac{?}{19}$ with $10\%$ annual interest payments. The market rate of interest was also $10\%$ at the date of issue. The market rate on the note receivable at the date Gardens investment was made was $9\mathrm{.}5\%.$

a$.$ Prepare the required consolidation entries for $2020.$ All numbers on the worksheet are in $000\text{'}$s$.$ These should be neatly written on pages separately from the worksheet. Show all of your work in an organized, clear manner. Use formatting similar to the in$-$class multiple year problem.

b$.$ Prepare the consolidated worksheet. Consolidation Worksheet $12/31/20($in $000\text{'}$s$)$