Giant acquired all of Small's common stock on January 1, 2017, 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, $34,500 of the fair value price was attributed to undervalued land while $99,000 was assigned to undervalued equipment having a 10 year remaining life The $66,500 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 The following are individual financial statements for the year ending December 31, 2021 On that date, Small owes Giant $14,800 Small declared and paid dividends in the same period Credits are indicated by parentheses Giant Small Revenues Cost of goods sold Depreciation expense Equity in income of Small Net income Retained earnings, 1 1 21 Net income (above) Dividends declared Retained earnings, 12 31 21 Current assets Investment in Small Land Buildings (net) Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings (above) Total liabilities and equities $ (1,222,400) $ (477,000) 585,000 173,500 (162,100) 300,000 97,000 208,000 $ (626,000) $ (172,000) $ (1,240,000) $ (655,000) (626,000) (172,000) 110,000 $ (1,566,000) $ (717,000) $ 216,500 $ 337,000 1,037,500 427,000 257,000 436,000 310,000 287,000 725,000 0 $ 2,693,000 $ 1,340,000 $ (877,000) $ (250,000) (1,566,000) (453,000) (170,000) (717,000) $ (2,693,000) $ (1,340,000) a How was the $162,100 Equity in Income of Small balance computed b Determine the totals to be reported by this business combination for the year ending December 31, 2021 c Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2021 d If Giant determined that the entire amount of goodwill from its investment in Small was impaired in 2021, what journal entry would Glant make to record such impairment

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Giant acquired all of Small's common stock on January 1, 2017, 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, $34,500 of the fair value price was attributed to undervalued land while $99,000 was assigned to undervalued equipment having a 10 year remaining life  The $66,500 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  The following are individual financial statements for the year ending December 31, 2021  On that date, Small owes Giant $14,800  Small declared and paid dividends in the same period  Credits are indicated by parentheses  Giant Small Revenues Cost of goods sold Depreciation expense Equity in income of Small Net income Retained earnings, 1 1 21 Net income (above) Dividends declared Retained earnings, 12 31 21 Current assets Investment in Small Land Buildings (net) Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings (above) Total liabilities and equities $ (1,222,400) $ (477,000) 585,000 173,500 (162,100) 300,000 97,000 208,000 $ (626,000) $ (172,000) $ (1,240,000) $ (655,000) (626,000) (172,000) 110,000 $ (1,566,000) $ (717,000) $ 216,500 $ 337,000 1,037,500 427,000 257,000 436,000 310,000 287,000 725,000 0 $ 2,693,000 $ 1,340,000 $ (877,000) $ (250,000) (1,566,000) (453,000) (170,000) (717,000) $ (2,693,000) $ (1,340,000) a  How was the $162,100 Equity in Income of Small balance computed  b  Determine the totals to be reported by this business combination for the year ending December 31, 2021  c  Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2021  d  If Giant determined that the entire amount of goodwill from its investment in Small was impaired in 2021, what journal entry would Glant make to record such impairment

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