Giant acquired all of Smalls common stock on January 1, 2014, in exchange for cash of $770,000 On that day, Small reported common stock of $170,000 and retained earnings of $400,000 At the acquisition date, $90,000 of the fair value price was attributed to undervalued land while $50,000 was assigned to undervalued equipment having a 10 year remaining life The $60,000 unallocated portion of the acquisition date excess fair value over book value was viewed as goodwill Over the next few years, Giant applied the equity method to the recording of this investment Following are individual financial statements for the year ending December 31, 2018 On that date, Small owes Giant $10,000 Small declared and paid dividends in the same period Credits are indicated by parentheses How was the $135,000 Equity in Income of Small balance computed Determine the totals to be reported by this business combination for the year ending December 31, 2018 Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2018 If Giant determined that the entire amount of goodwill from its investment in Small was impaired in 2018, what journal entry would Giant make to record such impairment $ Small (360,000) 90,000 130,000 $ $ Revenues Cost of goods sold Depreciation expense Equity in income of Small Net income Retained earnings, 1 1 15 Net income (above) Dividends declared Retained earnings, 12 31 15 Current assets Investment in Small Land Buildings (net) Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings (above) Total liabilities and equities Giant $ (1,175,000) 550,000 172,000 (135,000) $ (588,000) $ (1,417,000) (588,000) 310,000 $ (1,695,000) 398,000 995,000 440,000 304,000 648,000 (140,000) (620,000) (140,000) 110,000 (650,000) 318,000 $ $ 165,000 419,000 286,000 $ 2,785,000 $ (840,000) (250,000) (1,695,000 $ (2,785,000) $1,188,000 $ (368,000) (170,000) (650,000) $ (1,188,000)

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Giant acquired all of Smalls common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of

Giant acquired all of Smalls common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $90,000 of the fair-value price was attributed to undervalued land while $50,000 was assigned to undervalued equipment having a 10-year remaining life. The $60,000 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment.

Following are individual financial statements for the year ending December 31, 2018. On that date, Small owes Giant $10,000. Small declared and paid dividends in the same period. Credits are indicated by parentheses.

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How was the $135,000 Equity in Income of Small balance computed?
Determine the totals to be reported by this business combination for the year ending December 31, 2018.
Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2018.
If Giant determined that the entire amount of goodwill from its investment in Small was impaired in 2018, what journal entry would Giant make to record such impairment?

$ Small (360,000) 90,000 130,000 $ $ Revenues Cost of goods sold Depreciation expense Equity in income of Small Net income Retained earnings, 1/1/15 Net income (above) Dividends declared Retained earnings, 12/31/15 Current assets Investment in Small Land Buildings (net) Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings (above) Total liabilities and equities Giant $ (1,175,000) 550,000 172,000 (135,000) $ (588,000) $ (1,417,000) (588,000) 310,000 $ (1,695,000) 398,000 995,000 440,000 304,000 648,000 (140,000) (620,000) (140,000) 110,000 (650,000) 318,000 $ $ 165,000 419,000 286,000 $ 2,785,000 $ (840,000) (250,000) (1,695,000 $ (2,785,000) $1,188,000 $ (368,000) (170,000) (650,000) $ (1,188,000)