Donna Company acquired 75 percent of the stock of Sons Inc. on January 1, 2015, for $280,000. On this date, the balances of Sons' stockholders' equity accounts were Common Stock, $195,000, and Retained Earnings, $45,000. As of that date, the fair market value for the 25% of shares not purchased by Donna was $90,000 On January 1, 2015, Sons' recorded book values were equal to fair values for all items except four: (1) accounts receivable had a book value of $55,000 and a fair value of $48,000, (2) property, plant & equipment, net, had a book value of $150,000 and a fair value of $168,000, (3) a previously unrecorded customer list intangible asset had a book value of $0 and a fair value of $30,000, and (4) notes payable had a book value of $30,000 and a fair value of $25,000. Both companies use the FIFO inventory method and sell all of their inventories at least once a year. The year-end net balance of accounts receivables are collected in the following year. On the acquisition date, Sons' PP&E, net had a remaining life of 10 years, the customer list had a remaining life of four years, and the note payable had a remaining term of five years. On January 1, 2018, Donna sold a building to Sons for $80,000. On this date, the building was carried on Donna's books at a cost of $100,000 with accumulated depreciation of $45,000. Both companies estimated that the building has a remaining life of 10 years on the intercompany sale date, with no salvage value. Each company routinely sells merchandise to the other company, with a profit margin of 40 percent of selling price (regardless of the direction of the sale). During 2019, intercompany sales amount to $50,000, of which $20,000 remains in the ending inventory of Sons. On December 31, 2019, $10,000 of these intercompany sales remain unpaid. Additionally, Donna's December 31, 2018 inventory includes $15,000 of merchandise purchased in the preceding year from Sons. During 2018, intercompany sales amount to $40,000, and on December 31, 2018, $8,000 of these intercompany sales remain unpaid. Donna accounts for its investment in Sons using the equity method. Unconfirmed profits are allocated pro- rata. Debits Donna Sons Cash $58,080 $42,500 Accounts Receivable 81,000 60,000 Inventories 195,000 91,500 Property, plant & equipment, net 189,000 135,000 Other assets 85,500 150,000 Investment in Sons 325,500 Cost of good sold 432,000 162,000 Depreciation & amortization expenses 18,000 14,400 operating expenses 226,000 54,100 Interest expenses 8,000 3,500 Dividend 90,000 21,000 Total debits $1,708,080 $734,000 Credit Accounts payable $168,000 $35,000 Notes payable 80,980 30,000 Other liabilities 33,000 39,000 Common stocks 360,000 195,000 Retained earnings (Jan. 1, 2019) 322,200 165,000 sales 720,000 270,000 equity income (loss) from Sons 23,900 Total credit $1,708,080 $734,000 Required: 1. In one worksheet, prepare a consolidation spreadsheet using the December 31, 2019 pre-closing trial balance information for Donna and Sons provided at the following page. 2. Program formulas in additional worksheets that result in the following consolidated financial statements: Income Statement; Statement of Retained Earnings; Balance Sheet. 3. Prepare schedules that compute the following: a. Goodwill (as computed on January 1, 2015) b. Equity income from Sons (for 2019) c. Investment in Sons as of December 31, 2019 d. Income attributable to the noncontrolling interest (for 2019) e. Noncontrolling interest as of December 31, 2019. 4. Prepare a separate list of the consolidating entries, properly labeled, that are included in the consolidation spreadsheet. Donna Company acquired 75 percent of the stock of Sons Inc. on January 1, 2015, for $280,000. On this date, the balances of Sons' stockholders' equity accounts were Common Stock, $195,000, and Retained Earnings, $45,000. As of that date, the fair market value for the 25% of shares not purchased by Donna was $90,000 On January 1, 2015, Sons' recorded book values were equal to fair values for all items except four: (1) accounts receivable had a book value of $55,000 and a fair value of $48,000, (2) property, plant & equipment, net, had a book value of $150,000 and a fair value of $168,000, (3) a previously unrecorded customer list intangible asset had a book value of $0 and a fair value of $30,000, and (4) notes payable had a book value of $30,000 and a fair value of $25,000. Both companies use the FIFO inventory method and sell all of their inventories at least once a year. The year-end net balance of accounts receivables are collected in the following year. On the acquisition date, Sons' PP&E, net had a remaining life of 10 years, the customer list had a remaining life of four years, and the note payable had a remaining term of five years. On January 1, 2018, Donna sold a building to Sons for $80,000. On this date, the building was carried on Donna's books at a cost of $100,000 with accumulated depreciation of $45,000. Both companies estimated that the building has a remaining life of 10 years on the intercompany sale date, with no salvage value. Each company routinely sells merchandise to the other company, with a profit margin of 40 percent of selling price (regardless of the direction of the sale). During 2019, intercompany sales amount to $50,000, of which $20,000 remains in the ending inventory of Sons. On December 31, 2019, $10,000 of these intercompany sales remain unpaid. Additionally, Donna's December 31, 2018 inventory includes $15,000 of merchandise purchased in the preceding year from Sons. During 2018, intercompany sales amount to $40,000, and on December 31, 2018, $8,000 of these intercompany sales remain unpaid. Donna accounts for its investment in Sons using the equity method. Unconfirmed profits are allocated pro- rata. Debits Donna Sons Cash $58,080 $42,500 Accounts Receivable 81,000 60,000 Inventories 195,000 91,500 Property, plant & equipment, net 189,000 135,000 Other assets 85,500 150,000 Investment in Sons 325,500 Cost of good sold 432,000 162,000 Depreciation & amortization expenses 18,000 14,400 operating expenses 226,000 54,100 Interest expenses 8,000 3,500 Dividend 90,000 21,000 Total debits $1,708,080 $734,000 Credit Accounts payable $168,000 $35,000 Notes payable 80,980 30,000 Other liabilities 33,000 39,000 Common stocks 360,000 195,000 Retained earnings (Jan. 1, 2019) 322,200 165,000 sales 720,000 270,000 equity income (loss) from Sons 23,900 Total credit $1,708,080 $734,000 Required: 1. In one worksheet, prepare a consolidation spreadsheet using the December 31, 2019 pre-closing trial balance information for Donna and Sons provided at the following page. 2. Program formulas in additional worksheets that result in the following consolidated financial statements: Income Statement; Statement of Retained Earnings; Balance Sheet. 3. Prepare schedules that compute the following: a. Goodwill (as computed on January 1, 2015) b. Equity income from Sons (for 2019) c. Investment in Sons as of December 31, 2019 d. Income attributable to the noncontrolling interest (for 2019) e. Noncontrolling interest as of December 31, 2019. 4. Prepare a separate list of the consolidating entries, properly labeled, that are included in the consolidation spreadsheet