Lion Corporation acquired 100 percent ownership of 2ebra Products on January 1, 2016. for $200,000. On that date, Zebra reported retained earnings of $50,000 and had $10,000 of common stock outstanding and $90,000 of Paid in Capita Geen has used the equity method of accounting for its investment in Up. On the date of the business combination, Zebra had an unrecorded patent with a fair value of $20,000 with a remaining life of 10 years. In addition, notes payable is overvalued by $15,000 and has a remaining life of 5 years. Any remaining acquisition differential is assigned to goodwill, which is I not impaired at December 31, 2016. There was $20,000 of intercompany receivables/payables as of 12/31/16 Required: Carefully Follow and label each step. Points 1. Prepare the acquisition analysis as of acquisition date. Compute the unamortized differential as of 1/1/2016. 10 2. Verify the calculation of the balance in the acccount equity in sub earnings and record the parent company entries with respect to its equity 25 investment in sub 3. Calculate Net Income Allocated to the Controlling Interest 25 4. Prepare all elimination entries for 2016 25 5. Complete the consolidating spreadsheet for the year ended 2016. 15

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