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Naomi Corporation acquired 7 5 % of the outstanding stock of Winnie, Inc., on January 1 , 2 0 1 9 , for $ 1

Naomi Corporation acquired 75% of the outstanding stock of Winnie, Inc., on January 1,2019, for $1,530,000 in cash. The remaining 25% of Winnies stock traded actively at the same price as Naomi paid. The book value of Winne, Inc. at acquisition date was $1,340,000. One of Winnies buildings, with a 16-year remaining life, was undervalued in the companys accounting records by $160,000. Also, Winnies newly developed patent, with an estimated 10-year life, was assessed to have a fair value of $395,000. During subsequent years, Winnie reports the following:
Net Income Dividends
2019 $210,000 $ 80,000
2020 $235,000 $100,000
2021 $285,000 $110,000
The financial results for December 31,2022 are listed below for the two companies.
Naomi Winnie
BV BV
12/31/202212/31/2022
Revenues ($879,000)($525,000)
Operating expenses 450,000200,000
Investment income (206,625)0
Net income ($635,625)($325,000)
Retained earnings, 1/1/22($2,240,000)($1,330,000)
Net income (635,625)(325,000)
Dividends declared 245,000120,000
Retained earnings 12/31/22($2,630,625)($1,535,000)
Current assets $1,605,625 $975,000
Investment in subsidiary 1,865,2500
Land 670,000435,000
Buildings (net)835,000600,000
Equipment (net)350,000175,000
Total assets $5,325,875 $2,185,000
Liabilities ($285,000)($200,000)
Common stock (750,000)(40,000)
Additional paid-in-capital (1,660,250)(410,000)
Retained earnings (2,630,625)(1,535,000)
Total Liabilities & equities ($5,325,875)($2,185,000)
Required (25 points)
a. Prepare a consolidation worksheet for this business combination.
b. Prepare the consolidating entry *C that would have been required if Naomi had used the initial value method for accounting for its investment in Winnie.
c. Prepare the consolidating entry *C that would have been required if Naomi had used the partial equity method for accounting for its investment in Winnie. formatted in excel sheet

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