Giant acquired all of Smalls 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, $75,000 of the fair-value price was attributed to undervalued land while $63,000 was assigned to undervalued equipment having a 10-year remaining life. The $62,000 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.

The following are individual financial statements for the year ending December 31, 2021. On that date, Small owes Giant $10,300. Small declared and paid dividends in the same period. Credits are indicated by parentheses.

	Giant				Small
Revenues	$	(1,200,300	)		$	(493,500	)
Cost of goods sold		573,000				114,500
Depreciation expense		178,000				215,000
Equity in income of Small		(157,700	)			0
Net income	$	(607,000	)		$	(164,000	)
Retained earnings, 1/1/21	$	(1,550,000	)		$	(705,000	)
Net income (above)		(607,000	)			(164,000	)
Dividends declared		290,000				110,000
Retained earnings, 12/31/21	$	(1,867,000	)		$	(759,000	)
Current assets	$	342,500			$	332,000
Investment in Small		1,097,500				0
Land		516,000				250,000
Buildings (net)		369,000				473,000
Equipment (net)		728,000				297,000
Goodwill		0				0
Total assets	$	3,053,000			$	1,352,000
Liabilities	$	(936,000	)		$	(423,000	)
Common stock		(250,000	)			(170,000	)
Retained earnings(above)		(1,867,000	)			(759,000	)
Total liabilities and equities	$	(3,053,000	)		$	(1,352,000	)

1. How was the $157,700 Equity in Income of Small balance computed?
2. Determine the totals to be reported by this business combination for the year ending December 31, 2021.
3. Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2021.
4. If Giant determined that the entire amount of goodwill from its investment in Small was impaired in 2021, what journal entry would Giant make to record such impairment?

Required A Required B Required C Required D Determine the totals to be reported by this business combination for the year ending Decemb as positive values.) Totals Revenues Cost of goods sold Depreciation expense Income of Small $ 1,693,800 $ 687,500 $ 399,300 $ 0 Net income $ 607,000 $ 1,550,000 $ 290,000 Retained earnings, 1/1/21 Dividends declared Retained earnings, 12/31/21 Current assets $ 1,867,000 $ 664,200 Investment in Small $ 0 Land $ 841,000 $ 842,000 Building (net) Equipment (net) Goodwill Total assets Liabilities Common stock $ 250,000 $ 1,867,000 Retained earnings, 12/31/21 Total liabilities and equity Amounts in the Debit and credit columns should be entered as positive. Input all amounts as positive values.) Show GIANT COMPANY AND SMALL COMPANY Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Accounts Giant Small Debit Credit Consolidated Totals Revenues $ (493,500) 1,693,800 $ (1,200,300) 573,000 178,000 114,500 215,000 687,500 399,300 6,300 Cost of goods sold Depreciation expense Equity income of Small Net income 0 157,700 0 (157,700) $ (607,000) $ (164,000) $ 607,000 Retained earning, 1/1/21 > 705,000 Net income (above) Dividends declared 607,000 $ (1,550,000) (607,000) 290,000 $ (1,867,000) $ (705,000) (164,000) 110,000 Retained earnings, 12/31/21 $ (759,000) Current assets $ $ 332,000 0 Investment in Small Land 342,500 1,097,500 516,000 369,000 728,000 Buildings (net) Equipment (net) Goodwill 250,000 473,000 297,000 0 0 Total assets $ 3,053,000 $ 1,352,000 Liabilities Common stock $ (936,000) (250,000) (1,867,000) $ (3,053,000) $ (423,000) (170,000) (759,000) Retained earnings (above) Total liabilities and equity 869,000 0 (1,352,000) Required A Required B Required C Required D If Giant determined that the entire amount of goodwill from its investment in Small was impaired in 2021, what journ Giant make to record such impairment? (If no entry is required for a transaction/event, select "No journal entry requir account field.) View transaction list Journal entry worksheet 1 Record the loss on impairment of goodwill. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal