On December 31^st.2015, X Inc. purchased 75% of the shares of Y Co. for $3,570,000. On that date, the carrying amount of Ys identifiable net assets was $4,080,000 (Common Stock was $2,780,000 and retained earnings $1,300,000) . The carrying amount of Ys identifiable net assets were equal to their fair values except that the carrying amount of Ys inventory was $2,000,000 while its fair value was $2,119,000, and Y had unrecognized trademarks that were worth $138,000.

On the acquisition date, Ys retained earnings were $1,080,000. The trademarks are being amortized over 6 years. During 2019, an impairment loss of $170,000 occurred for the goodwill. Prior to 2019, there had not been any goodwill impairment.

X INC. & Y LTD.

Statements of Income and Retained Earnings

Year ended December 31^st.2019

X..Y

Sales.$.12,280,000 $7,370,000

Investment Income. .... 240,000. 12,000

TOTAL REVENUE.....$12,520,000$7,382,000

EXPENSES:-

Cost of goods sold.......... 7,859,0005,159,000

Depreciation and amortization expenses. ...................... 531,000. 350,000

Interest expense............ 212,000 152,000

Other expenses ............ 793,000.. 356,000

TOTAL EXPENSES:........10,645,000.6,563,000

NET INCOME....... 1,875,000 819,000

Retained earnings at the beginning of the Year.....................1,722,000 1,300,000

Dividends...... 625,000 320,000

Retained Earnings, end of Year.................... $2,972,000.$1,799,000

X INC. & Y LTD.

Balance Sheets

December 31^st.2019

XY

Assets:-

Cash and receivables$1,516,000$ 896,000

Inventory4,124,000 2,850,000

Investment in Y.3,570,000

Loan to X 300,000

Property, plant and equipment, net..........5,906,000 5,756,000

TOTAL ASSETS.....$15,116,000$9,802,000

Liabilities& Shareholders Equity:

Current liabilities....$ 2,844,000...$1,203,000

Long-term liabilities..5,300,000. 3,800,000

Common shares.4,000,000.3,000,000

Retained Earnings.... 2,972,000.1,799,000

TOTAL LIABILITIES& OWNERS EQUITY ............$15,116,000$9,802,000

Additional Information:-

1. On January 1^st.2019, Y loaned X $300,000, none of which has been paid back. Y earned $12,000 in interest on the loan, which has been reported as investment income. The interest has not yet been received.
2. Y regularly sells inventory to X at a price that earns a gross profit of 30% for Y/ During 2019, X purchased $1,000,000 of inventory from Y and $400,000 of it remained unsold at December 31^st.2019. At December 31^st.2018, X did not have any inventory from Y on hand.
3. On December 31^st.2017, Y had sold some equipment to X for $700,000 (equipment is still being used by X). Ys carrying amount for this equipment just prior to its sale was $400,000. The remaining useful life of the equipment was 15 years on the date of the sale.
4. Land that originally cost $390,000 had been sold by X to Y in 2017 for $490,000. This land is still held by Y at December 31^st.2019.
5. The tax rate is 40%.
6. X uses the cost method to account for the investment in Y in its separate entity financial statements.
7. X uses the acquisition method to value NCI

Required:-(a)Prepare the following for X's consolidated balance sheet:-

i. Goodwill

ii. Amortization schedule

iii. Inventory

iv. Property, Plant and Equipment

v. Deferred Tax Assets

vi. Consolidated Net Income

vii. NCI for the Balance Sheet.

(b) Prepare the elimination working paper entry at acquisition