I am stuck at the part with all X, can anyone help me figure it out?
Problem 3-26 (LO 3-1, 3-3a) 10 points On January 3, 2016, Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc. in exchange for $9,423,000 in cash. Persoff elected to exercise control over Sea Cliff as a wholly owned subsidiary with an independent accounting system. Both companies have December 31 fiscal year-ends. At the acquisition date, Sea Cliff's stockholders' equity was $2,615,500 including retained earnings of $1,815,500. eBook Persoff pursued the acquisition, in part, to utilize Sea Cliff's technology and computer software. These items had fair values that differed from their values on Sea Cliff's books as follows: Print References Asset Patented technology Computer software Book Value $ 192,500 91,500 Fair Value $ 3,027,500 3,811,500 Remaining Useful Life 7 years 12 years Sea Cliff's remaining identifiable assets and liabilities had acquisition-date book values that closely approximated fair values. Since acquisition, no assets have been impaired. During the next three years, Sea Cliff reported the following income and dividends: 2016 2017 2018 Net Income $ 902,100 942,100 977,100 Dividends $ 150,000 150,000 150,000 December 31, 2018, financial statements for each company appear below. Parentheses indicate credit balances. Dividends declared were paid in the same period. Persoff Sea Cliff $ (2,930,000) 1,452,900 327,500 433,000 (262,100) $ (978,700) $(2,355,000) 909,900 422,000 46,000 $ (977,100) $ (7,575,000) (978,700) 600,000 $ (7,953, 700) $ (3,359,700) (977,100) 150,000 $ (4,186, 800) Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Equity earnings in Sea Cliff Net income Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 Balance Sheet Current assets Investment in Sea Cliff Computer software Patented technology Goodwill Equipment Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity $ 584,500 9,649,300 405,000 926,000 142,000 1,908,500 $ 13,615,300 $ (3,661,600) (2,000,000) (7,953,700) $ (13,615,300) $ 427,500 0 76,500 122,000 0 4,710,000 $ 5,336,000 $ (349,200) (800,000) (4,186, 800) $ (5,336,000) Note: Parentheses indicate a credit balance. a. Determine the fair value in excess of book value for Persoff's acquisition date investment in Sea Cliff. b. Determine Persoff's Equity earnings in Sea Cliff's balance for the year ended December 31, 2018. c. Determine Persoff's December 31, 2018, Investment in Sea Cliff's balance. d. Prepare a worksheet to determine the consolidated values to be reported on Persoff's financial statements. PERSOFF CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year December 31, 2018 Consolidation Entries Persoff Sea Cliff Debit Credit Accounts Consolidated Totals Income Statement Revenues (2,930,000) $ Cost of goods sold Depreciation expense Amortization expense Equity earnings in Sea Cliff Net income 1,452,900 327,500 433,000 (262,100) (978,700) (2,355,000) 909,900 422,000 46,000 (5,285,000) 2,362,800 749,500 1,194,000 0 (978,700) 715,000 262,100 $ $ (977,100) $ Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared 3,359,700 (7,575,000) (978,700) 600,000 (3,359,700) (977,100) 150,000 (7,575,000) (978,700) 600,000 150,000 Retained earnings 12/31 $ (7,953,700) (4,186,800) $ (7,953,700)
