omprehensive Problem: Consolidation Working Paper and Financial Statements Corporation acquired 75 percent of Selene Corporation's common stock for $20,100,000o 6 Consolidated Financial Statements: Intercompany Transacu January 2 P6.6 C ae unreported completed technology, valued at $4,000,000, with a remaining life of 5 years, s is The estimated fair value of the noncontrolling interest was $5,900,000. Selene's book valu now December 31, 2020, and you are preparing consolidated financial statements for Pie Following is information on intercompany transactions: of acquisition was $10,000,000, and its identifiable net assets were fairly stated except fo 1. On January 2,2018, Pierre sold equipment to Selene for $6 million and recorded a gain of $2 mi 2. Selene supplies Pierre with component parts for its products, at a markup of 20 percent on million and $2.4 million in its 2020 beginning and ending inventory balances, respectively 3. Pierre sells materials to Selene for use in its manufacturing processes, at a markup of 20 percent on se On, The equipment had a remaining life of 10 years at that time During 2020, Selene made sales totaling $20 million to Pierre. Pierre had parts purchased for S ing price. During 2020, Pierre made sales totaling $15 million to Selene. Selene had materials Goodwill arising from this acquisition was impaired by $3 million during the years 2017-2019, and appear below, before Pierre's end-of-year adjustment to record its equity in Selene's net income an purc for $3 million and $2.8 million in its 2020 beginning and ending inventory balances, respectivel further goodwill impairment occurred in 2020. Pierre uses the complete equity method to re vestment in Selene on its own books. The separate December 31,2020, trial balances of Pierre no In- and Selen port the i comprehensive income for 2020 Dr (Cr) (in thousands) Pierre Selene $ 2,500 10,000 30,000 6,000 144,000 Cash Receivables Inventories . Investment in AFS debt securities Plant and equipment, net.... Investment in Selene . Current liabilities. Long-term debt Capital stock Retained earnings, January 1 Accumulated other comprehensive income, January 1. . Dividends Sales revenue Cost of sales. Operating expenses.. Unrealized losses on AFS investments (other comprehensive income)...... 5,600 70,000 8,000 .452,000 20,225 (4,000) (489,825) (5,000) (88,500) (1,500) 40,000 (150,000) 100,000 41,500 500 (2,800) (163,700) (19,600) 3,000 (50,000) 35,000 a. Calculate the total goodwill arising from this acquisition and its percentage allocation to the con b. Prepare a schedule calculating Pierre's equity in the net income of Selene for 2020, and the noncoi ling and noncontrolling interests. trolling interest in Selene's net income for 2020 Update Pierre's trial balance for its 2020 equity method entries and prepare a working paper c dating the 2020 trial balances of Pierre and Selene Present the consolidated financial statements of Pierre and Selene, in proper format d. 7 Calculation of Investment and Consolidated f tion Pentland Sho