On January 1, 2017, Adora Corporation acquired 100 percent of the outstanding voting stock of Alab Corporation for $2,099.600 cash. On the acquisition date, akah had the following balance sheet: Cash Accounts receivable Land Equipment (net) $ 152,000 137,000 730,000 1,942,000 $2,961,000 Accounts payable Long-term debt Common stock Retained earnings $184,000 985,000 1,049,000 743,000 $2,961,000 At the acquisition date the following allocation was prepared: Fair value of consideration transferred Book value acquired Excess fair value over book value To in-process research and development To equipment (8-year remaining life) To goodwill findefinite life) 52,099,600 1,792,000 307,600 $ 49,000 133, 600 277,600 130,000 Although at acquisition date Adora had expected $44,000 in future benefits from Ahah's in-process research and development project, by the end of 2017, it was apparent that the research project was a failure with no future economic benefits. On December 31, 2018, Adora and Akah submitted the following trial balances for consolidation. There were no intra-entity payables on that date adora Basah Sales $ (3,795, 2007 $(1,166,250) Cost of goods sold 1,810,000 745,000 Depreciation expense 335,000 147,000 Other operating expenses 223,000 37,250 Subsidiary income 1220, 300) 0 Net income $ (1,647,500) $ (237,000) Retained earnings 1/1/18 $ (3,052, 500) $ 1936,000) Net incombe (1,647,5001 (237,000) Dividends declared 300,000 26, 225 Retained earnings 12/31/18 $4,400,000) $(1,146,775) Cash 110, 025 $ 6,275 Accounts receivable 937,000 164,000 Inventory 900,000 613,000 Investment in Gaugelise 2, 425,975 0 Land 3, 120,000 760,000 Equipment (net) 5,180,000 1,942,500 Goodwill 354,000 0 Total assets $ 13,035,000 $ 3,485, 775 Accounts payable $ (220,000 $ (455, 000) Long-term debt $ (3,265,000) $ (835, 000) Common stock (5,150,000) (1,049,000) Retained earnings 12/31/18 [4,400,000) 1,146.775) Total liabilities and equity $(13,035, 000) $(3,485,775) I a. Show how Adora derived its December 31, 2018, Lavestment in Account balance b. Prepare a consolidated worksheet for Adora and balas of December 31, 2018 On January 1, 2017, Adora Corporation acquired 100 percent of the outstanding voting stock of Alab Corporation for $2,099.600 cash. On the acquisition date, akah had the following balance sheet: Cash Accounts receivable Land Equipment (net) $ 152,000 137,000 730,000 1,942,000 $2,961,000 Accounts payable Long-term debt Common stock Retained earnings $184,000 985,000 1,049,000 743,000 $2,961,000 At the acquisition date the following allocation was prepared: Fair value of consideration transferred Book value acquired Excess fair value over book value To in-process research and development To equipment (8-year remaining life) To goodwill findefinite life) 52,099,600 1,792,000 307,600 $ 49,000 133, 600 277,600 130,000 Although at acquisition date Adora had expected $44,000 in future benefits from Ahah's in-process research and development project, by the end of 2017, it was apparent that the research project was a failure with no future economic benefits. On December 31, 2018, Adora and Akah submitted the following trial balances for consolidation. There were no intra-entity payables on that date adora Basah Sales $ (3,795, 2007 $(1,166,250) Cost of goods sold 1,810,000 745,000 Depreciation expense 335,000 147,000 Other operating expenses 223,000 37,250 Subsidiary income 1220, 300) 0 Net income $ (1,647,500) $ (237,000) Retained earnings 1/1/18 $ (3,052, 500) $ 1936,000) Net incombe (1,647,5001 (237,000) Dividends declared 300,000 26, 225 Retained earnings 12/31/18 $4,400,000) $(1,146,775) Cash 110, 025 $ 6,275 Accounts receivable 937,000 164,000 Inventory 900,000 613,000 Investment in Gaugelise 2, 425,975 0 Land 3, 120,000 760,000 Equipment (net) 5,180,000 1,942,500 Goodwill 354,000 0 Total assets $ 13,035,000 $ 3,485, 775 Accounts payable $ (220,000 $ (455, 000) Long-term debt $ (3,265,000) $ (835, 000) Common stock (5,150,000) (1,049,000) Retained earnings 12/31/18 [4,400,000) 1,146.775) Total liabilities and equity $(13,035, 000) $(3,485,775) I a. Show how Adora derived its December 31, 2018, Lavestment in Account balance b. Prepare a consolidated worksheet for Adora and balas of December 31, 2018