Financial Statement for both companies provided. Please show ALL work. Thank you so much I know its a big question!

QUESTION 2 On January 1,2018, Pontiac Corp. purchased 80.00% of the net assets of Sunbeam Corp. for $219,750. The fair value of Sunbeam Corp. on January 1, 2011 is estimated to be $274,687. The write-up of the Buildings and Equipment from book value to fair market value amounted to 54.00% of the total differential. The write-up of the Land from book value to fair market value amounted to 12.00% of the total differential. The remaining 34.00% of the total differential is attributable to Goodwill . The remaining useful life of the Buildings and Equipment is assumed to be 10 years. Goodwill is impaired at the end of 2018 and 2019 and must be written down, each year, by 12.00% of its original (initial) value. The company uses the equity method approach to account for the goodwill impairment A complete set of financial statements for fiscal years 2018 and 2019 for Pontiac Corp. is located in Exhibit 3. A complete set of financial statements for fiscal years 2018 and 2019 for Sunbeam Corp. is located in Exhibit 4. 1) Based on the purchase price, calculate the purchased differential (in dollars), as well as the purchased differential (in dollars) applied to: i) Buildings and Equipment, ii) Land and ii) Goodwill. (SHOW ALL WORK IN THE CALCULATION). 2) Based on the fair value, calculate the total differential (in dollars), as well as the total differential (in dollars) applied to: i) Buildings and Equipment, ii) Land and ill) Goodwill. (SHOW ALL WORK IN THE CALCULATION). 3) For fiscal year 2018, provide ALL journal entries (and t-accounts) used by the parent company to account for its investment in the subsidiary using the equity method. 4) For fiscal year 2018 provide ALL eliminating entries (and t-accounts) necessary to create consolidated financial statements. 5) For fiscal year 2018, create the consolidated financial statements using the 3-step worksheet. 6) For fiscal year 2019, provide ALL journal entries (and t-accounts) used by the parent company to account for its investment in the subsidiary using the equity method. 7) For fiscal year 2019 provide ALL eliminating entries (and t-accounts) necessary to create consolidated financial statements. 8) For fiscal year 2019, create the consolidated financial statements using the 3-step worksheet. Pontiac 12/31/18 Pontiac 12/31/19 INCOME STATEMENT Sales CGS Deprec and Amort Other Expenses Company Net Income Income from Subsidiary (Sanchez) Net Income $ 1,025,500 $1,128,050 $ 732,500 $ 805,750 $ 36,625 $ 36,625 $ 109,875 $ 120,863 $ 146,500 $ 164,813 $ 66,154 $ 73,010 $ 212,654 $ 237,822 STATEMENT OF RETAINED EARNINGS Retained Earnings 1/1/X7 Net Income (from Above) Dividends Declared Retained Earnings 12/31/X7 $ 290,000 $ 429,404 $ 212,654 $ 237,822 $ 73,250 $ 118,911 $ 429,404 $ 548,315 BALANCE SHEET Cash AR Inventory Land $ 384,840 $ 472,599 $ 102,550 $ 112,805 $ 256,375 $ 282,012 $ 117,200 $ 117,200 $ 732,500 $ 732,500 $ 166,625 $ 203,250 $ 565,875 $ 529,250 Build&Equip-HC Acc Dep Build&Equip-Net Investment in Subsidiary (Sanchez) Goodwill Differential Total Assets $ 262,464 $ 304,603 $ $ $ $ $1,689,304 $1,818,470 $ 102,550 $ 112,805 $ 571,350 $ 571,350 $ 673,900 $ 684,155 AP Bonds Payable Total Liabilities Shareholders Equity Common Stock Retained Earnings (from above) Total Shareholders Equity $ 586,000 $ 586,000 $ 429,404 $ 548,315 $ 1,015,404 $1,134,315 TL +TSE $1,689,304 $1,818,470 Balance $ Sunbeam 12/31/18 Sunbeam 12/31/19 INCOME STATEMENT Sales Income from Subsidiary Total Sales $ 586,000 $ 615,300 $ $ $ 586,000 $ 615,300 CGS Deprec and Amort Other Expenses Net Income $ 366,250 $ 381,486 $ 21,975 $ 21,975 $ 109,875 $ 115,369 $ 87,900 $ 96,470 $ 146,500 $ 205,100 $ 87,900 $ 96,470 $ 29,300 $ 38,588 $ 205,100 $ 262,982 STATEMENT OF RETAINED EARNINGS Retained Earnings (BOY) Net Income (from Above) Dividends Declared Retained Earnings (EOY) BALANCE SHEET Cash AR Inventory Land Build&Equip-HC Acc Dep Build&Equip-Net A A A A 36,625 $ 69,236 80,575 $ 92,295 $ 146,500 $ 184,590 $ 29,300 $ 29,300 $ 219,750 $ 219,750 $ 109,875 $ 131,850 $ 109,875 $ 87,900 Total Assets $ 402,875 $ 463,321 AP Bonds Payable Total Liabilities $ 51,275 $ 53,839 $ 73,250 $ 73,250 $ 124,525 $ 127,089 ul Shareholders Equity Common Stock Retained Earnings (from above) Total Shareholders Equity $ 73,250 $ 73,250 $ 205,100 $ 262,982 $ 278,350 $ 336,232 TL +TSE $ 402,875 $ 463,321 Balance $ $ QUESTION 2 On January 1,2018, Pontiac Corp. purchased 80.00% of the net assets of Sunbeam Corp. for $219,750. The fair value of Sunbeam Corp. on January 1, 2011 is estimated to be $274,687. The write-up of the Buildings and Equipment from book value to fair market value amounted to 54.00% of the total differential. The write-up of the Land from book value to fair market value amounted to 12.00% of the total differential. The remaining 34.00% of the total differential is attributable to Goodwill . The remaining useful life of the Buildings and Equipment is assumed to be 10 years. Goodwill is impaired at the end of 2018 and 2019 and must be written down, each year, by 12.00% of its original (initial) value. The company uses the equity method approach to account for the goodwill impairment A complete set of financial statements for fiscal years 2018 and 2019 for Pontiac Corp. is located in Exhibit 3. A complete set of financial statements for fiscal years 2018 and 2019 for Sunbeam Corp. is located in Exhibit 4. 1) Based on the purchase price, calculate the purchased differential (in dollars), as well as the purchased differential (in dollars) applied to: i) Buildings and Equipment, ii) Land and ii) Goodwill. (SHOW ALL WORK IN THE CALCULATION). 2) Based on the fair value, calculate the total differential (in dollars), as well as the total differential (in dollars) applied to: i) Buildings and Equipment, ii) Land and ill) Goodwill. (SHOW ALL WORK IN THE CALCULATION). 3) For fiscal year 2018, provide ALL journal entries (and t-accounts) used by the parent company to account for its investment in the subsidiary using the equity method. 4) For fiscal year 2018 provide ALL eliminating entries (and t-accounts) necessary to create consolidated financial statements. 5) For fiscal year 2018, create the consolidated financial statements using the 3-step worksheet. 6) For fiscal year 2019, provide ALL journal entries (and t-accounts) used by the parent company to account for its investment in the subsidiary using the equity method. 7) For fiscal year 2019 provide ALL eliminating entries (and t-accounts) necessary to create consolidated financial statements. 8) For fiscal year 2019, create the consolidated financial statements using the 3-step worksheet. Pontiac 12/31/18 Pontiac 12/31/19 INCOME STATEMENT Sales CGS Deprec and Amort Other Expenses Company Net Income Income from Subsidiary (Sanchez) Net Income $ 1,025,500 $1,128,050 $ 732,500 $ 805,750 $ 36,625 $ 36,625 $ 109,875 $ 120,863 $ 146,500 $ 164,813 $ 66,154 $ 73,010 $ 212,654 $ 237,822 STATEMENT OF RETAINED EARNINGS Retained Earnings 1/1/X7 Net Income (from Above) Dividends Declared Retained Earnings 12/31/X7 $ 290,000 $ 429,404 $ 212,654 $ 237,822 $ 73,250 $ 118,911 $ 429,404 $ 548,315 BALANCE SHEET Cash AR Inventory Land $ 384,840 $ 472,599 $ 102,550 $ 112,805 $ 256,375 $ 282,012 $ 117,200 $ 117,200 $ 732,500 $ 732,500 $ 166,625 $ 203,250 $ 565,875 $ 529,250 Build&Equip-HC Acc Dep Build&Equip-Net Investment in Subsidiary (Sanchez) Goodwill Differential Total Assets $ 262,464 $ 304,603 $ $ $ $ $1,689,304 $1,818,470 $ 102,550 $ 112,805 $ 571,350 $ 571,350 $ 673,900 $ 684,155 AP Bonds Payable Total Liabilities Shareholders Equity Common Stock Retained Earnings (from above) Total Shareholders Equity $ 586,000 $ 586,000 $ 429,404 $ 548,315 $ 1,015,404 $1,134,315 TL +TSE $1,689,304 $1,818,470 Balance $ Sunbeam 12/31/18 Sunbeam 12/31/19 INCOME STATEMENT Sales Income from Subsidiary Total Sales $ 586,000 $ 615,300 $ $ $ 586,000 $ 615,300 CGS Deprec and Amort Other Expenses Net Income $ 366,250 $ 381,486 $ 21,975 $ 21,975 $ 109,875 $ 115,369 $ 87,900 $ 96,470 $ 146,500 $ 205,100 $ 87,900 $ 96,470 $ 29,300 $ 38,588 $ 205,100 $ 262,982 STATEMENT OF RETAINED EARNINGS Retained Earnings (BOY) Net Income (from Above) Dividends Declared Retained Earnings (EOY) BALANCE SHEET Cash AR Inventory Land Build&Equip-HC Acc Dep Build&Equip-Net A A A A 36,625 $ 69,236 80,575 $ 92,295 $ 146,500 $ 184,590 $ 29,300 $ 29,300 $ 219,750 $ 219,750 $ 109,875 $ 131,850 $ 109,875 $ 87,900 Total Assets $ 402,875 $ 463,321 AP Bonds Payable Total Liabilities $ 51,275 $ 53,839 $ 73,250 $ 73,250 $ 124,525 $ 127,089 ul Shareholders Equity Common Stock Retained Earnings (from above) Total Shareholders Equity $ 73,250 $ 73,250 $ 205,100 $ 262,982 $ 278,350 $ 336,232 TL +TSE $ 402,875 $ 463,321 Balance $ $