f For Year Ended December 31, 2020 D E F On December 31, 2018, Palm Corporation issued 10,000 shares of its $10 par commons stock (current fair value $50 a share) to stockholders of Starr Company for all the outstanding $5 par common stock of Starr. There was no contingent consideration. Out of pocket costs of the business combination paid by Palm on December 31, 2018, consisted of: finder's and legal fees. $50,000; and costs associated with the SEC registration statement for Palm common stock $30,000. Both companies use the same accounting principles and procedures. The effective income tax rate for each company was 40%, but you may ignore income tax effects Financial statements of Palm Corporation and Starr Company for the year ended December 31. 2018, prior to the consummation of the business combination, follow: Palm Corporation and Starr Company Separate Financial Statements (Prior to business combination) For Year Ended December 31. 2018 Palm Corp. Starr Co Balance Sheets Assets Cash Inventories Other Current Assets Receivable from Starr Co. Plant Assets- Net Patent (Net) Total Assets 120,000 140,000 100,000 30,000 500,000 35,000 120.000 85.000 250.000 25,000 515.000 890,000 ch Alignment Liabilities and Stockholders' Equity Payable to Palm Corporation Income Taxes Payable Other Liabilities Common Stock, $10 par Common Stock $6 par Additional Paid in Capital Retained Earnings 25.000 367,000 300,000 30,000 10000 95.000 50.000 148,000 200.000 60,000 120,000 Total Liabilities and 890,000 515,000 Stockholders' Equity Statements of Income and Retained Eanings For the Year Ended December 31 2018 550.000 Net Sales Interest Revenue Total Revenue 1,000.000 10,000 1.010,000 625.000 385,000 550.000 390,000 Cost of Goods Sold Gross Margin 160000 Operating Expenses Interest Expense Income Tax Expense 160,000 45,000 72.000 277.000 75.000 35.000 20.000 130.000 Total Expenses Net Income Beginning Retained Earnings 108,000 30.000 100.000 (10,000) 65.000 Less: Dividends (25,000) Ending Retained Earnings 148.000 120,000 Filter Select Font Alignment Cells Editing f For Year Ended December 31, 2020 D E The December 31, 2018, current fair values of Starr Company's identifiable assets and liabilities were the same as their carrying amounts, except for the assets listed below Fair Value Book Value Difference Note: Difference in Plant Assets Attributable to: Land 12/31/2018 12/31/2018 130,000 120,000 320,000 250,000 Patent (net)(5 yr. life)35,000 25,000 Inventories Plant Assets (net) 10,000 70,000Building (15 yr. life) 10,000 M 90,000 20,000 30,000 Machinery (10 Yr. life)20,000 REQUIRED (1) Prepare the required journal entries to record the business combination at December 31.2018. (2) Prepare the December 31. 2018 required elimination entry or entries and post to a "Consolidated Balance Sheet Worksheet that you create (3) Prepare a Consolidated Balance Sheet at December 31, 2018 in good form. f For Year Ended December 31, 2020 D E F On December 31, 2018, Palm Corporation issued 10,000 shares of its $10 par commons stock (current fair value $50 a share) to stockholders of Starr Company for all the outstanding $5 par common stock of Starr. There was no contingent consideration. Out of pocket costs of the business combination paid by Palm on December 31, 2018, consisted of: finder's and legal fees. $50,000; and costs associated with the SEC registration statement for Palm common stock $30,000. Both companies use the same accounting principles and procedures. The effective income tax rate for each company was 40%, but you may ignore income tax effects Financial statements of Palm Corporation and Starr Company for the year ended December 31. 2018, prior to the consummation of the business combination, follow: Palm Corporation and Starr Company Separate Financial Statements (Prior to business combination) For Year Ended December 31. 2018 Palm Corp. Starr Co Balance Sheets Assets Cash Inventories Other Current Assets Receivable from Starr Co. Plant Assets- Net Patent (Net) Total Assets 120,000 140,000 100,000 30,000 500,000 35,000 120.000 85.000 250.000 25,000 515.000 890,000 ch Alignment Liabilities and Stockholders' Equity Payable to Palm Corporation Income Taxes Payable Other Liabilities Common Stock, $10 par Common Stock $6 par Additional Paid in Capital Retained Earnings 25.000 367,000 300,000 30,000 10000 95.000 50.000 148,000 200.000 60,000 120,000 Total Liabilities and 890,000 515,000 Stockholders' Equity Statements of Income and Retained Eanings For the Year Ended December 31 2018 550.000 Net Sales Interest Revenue Total Revenue 1,000.000 10,000 1.010,000 625.000 385,000 550.000 390,000 Cost of Goods Sold Gross Margin 160000 Operating Expenses Interest Expense Income Tax Expense 160,000 45,000 72.000 277.000 75.000 35.000 20.000 130.000 Total Expenses Net Income Beginning Retained Earnings 108,000 30.000 100.000 (10,000) 65.000 Less: Dividends (25,000) Ending Retained Earnings 148.000 120,000 Filter Select Font Alignment Cells Editing f For Year Ended December 31, 2020 D E The December 31, 2018, current fair values of Starr Company's identifiable assets and liabilities were the same as their carrying amounts, except for the assets listed below Fair Value Book Value Difference Note: Difference in Plant Assets Attributable to: Land 12/31/2018 12/31/2018 130,000 120,000 320,000 250,000 Patent (net)(5 yr. life)35,000 25,000 Inventories Plant Assets (net) 10,000 70,000Building (15 yr. life) 10,000 M 90,000 20,000 30,000 Machinery (10 Yr. life)20,000 REQUIRED (1) Prepare the required journal entries to record the business combination at December 31.2018. (2) Prepare the December 31. 2018 required elimination entry or entries and post to a "Consolidated Balance Sheet Worksheet that you create (3) Prepare a Consolidated Balance Sheet at December 31, 2018 in good form