On 1/1/20x1, Petwoud Company acquired 100% of the $1 par value outstanding voting common stock of Supagud, Inc. for a cash payment of $600,000. At the acquisition date, the fair value of Petwoud Company's common stock was $20 per share. Below is the summary balance sheet information of Supagud, Inc. at acquisition (1/1/20x1): Debit Credit 60,000 50,000 60,000 140,000 70,000 300,000 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (20-year life) Cash and short-term investments Common stock Equipment (net) (8-year life) Intangible assets (indefinite life) Land Long-term liabilities (mature 12/31/x3) Retained earnings, 1/1/x1 Supplies Totals Book value of net equity 240,000 110,000 90,000 180,000 120,000 20,000 720,000 480,000 720,000 During fiscal year-ending 12/31/20x1 and 12/31/20x2, Supagud, Inc. generated net income and paid dividends as follows: During fiscal year-ending 12/31/20x1 and 12/31/20x2, Supagud, Inc. generated net income and paid dividends as follows: Net income Dividends 20x1 $104,000 $13,000 20x2 $142,000 $30,000 As of 1/1/20x1, Supagud's land had a fair value of $102,000, its buildings were valued at $188,000, and its equipment was appraised at $216,000. According to Petwoud Company's analysis, they will record any excess of consideration paid over fair value of assets and liabilities acquired as a Patent asset to be amortized over 6 years. Required A. Using the acquisition method and assuming that Petwoud dissolves Supagud, Inc. so it is no longer in business, prepare Petwoud Company's journal entry to record the acquisition of Supagud, Inc. at 1/1/20x1. For B. and C. below, assume Supagud remains in business as a separate operating company and that, for internal accounting purposes, Petwoud accounts for their investment in Supagud, Inc. using the equity method: B. Prepare Petwoud Company's journal entry to record the acquisition of Supagud, Inc. at 1/1/20x1. C. Prepare Petwoud Company's worksheet consolidation journal entries for: i. December 31, 20x1 and ii. December 31, 20x2. On 1/1/20x1, Petwoud Company acquired 100% of the $1 par value outstanding voting common stock of Supagud, Inc. for a cash payment of $600,000. At the acquisition date, the fair value of Petwoud Company's common stock was $20 per share. Below is the summary balance sheet information of Supagud, Inc. at acquisition (1/1/20x1): Debit Credit 60,000 50,000 60,000 140,000 70,000 300,000 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (20-year life) Cash and short-term investments Common stock Equipment (net) (8-year life) Intangible assets (indefinite life) Land Long-term liabilities (mature 12/31/x3) Retained earnings, 1/1/x1 Supplies Totals Book value of net equity 240,000 110,000 90,000 180,000 120,000 20,000 720,000 480,000 720,000 During fiscal year-ending 12/31/20x1 and 12/31/20x2, Supagud, Inc. generated net income and paid dividends as follows: During fiscal year-ending 12/31/20x1 and 12/31/20x2, Supagud, Inc. generated net income and paid dividends as follows: Net income Dividends 20x1 $104,000 $13,000 20x2 $142,000 $30,000 As of 1/1/20x1, Supagud's land had a fair value of $102,000, its buildings were valued at $188,000, and its equipment was appraised at $216,000. According to Petwoud Company's analysis, they will record any excess of consideration paid over fair value of assets and liabilities acquired as a Patent asset to be amortized over 6 years. Required A. Using the acquisition method and assuming that Petwoud dissolves Supagud, Inc. so it is no longer in business, prepare Petwoud Company's journal entry to record the acquisition of Supagud, Inc. at 1/1/20x1. For B. and C. below, assume Supagud remains in business as a separate operating company and that, for internal accounting purposes, Petwoud accounts for their investment in Supagud, Inc. using the equity method: B. Prepare Petwoud Company's journal entry to record the acquisition of Supagud, Inc. at 1/1/20x1. C. Prepare Petwoud Company's worksheet consolidation journal entries for: i. December 31, 20x1 and ii. December 31, 20x2