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 $18.0 million in cash. Gardens reported the following income and dividends for 2019 and 2020 (in 000's): + Net Income Dividends 2019 1,000 300 The following are the fair value/book value amounts for Gardens on 1/1/19 (in 000's): Cash Receivables Notes Receivable Inventory (FIFO) Plant & Equipment Less: Accumulated Deprn. Patent Accounts Payable Bond Payable Common stock Retained Earnings Book Value 2020 4,000 1,500 Fair Values 600 600 700 700 1,000 ??? 1,200 1,300 10,000 12,000 4,000 5,000 99.938 99.938 1,071.062 1,327.029 5400 2929 The amounts below are not list in 000's but the full number is used. The $1,000,000 face bond pays interest semi-annually on 6/30 and 12/31. On 1/1/19, 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 1/1/19. The estimated fair value of anticipated operating synergies is $500,000 on 1/1/19. 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 1/1/19 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 9.5%. a. Prepare the required consolidation entries for 2020. All numbers on the worksheet are in 000'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.