On January 1, 2017 Packers Corp. purchased 90% of the outstanding shares of Seahawks Ltd. for $144,000 cash.On January 1, 2017 Seahawks had common shares of $75,000 and retained earnings of $30,000 and fair values were equal to book values for all the net assets except the following:

Book ValueFair Market Value

Inventory$80,000$75,000

Equipment105,000125,000

Patent---25,000

Bonds Payable100,00089,587

The equipment had an estimated remaining life of five (5) years on January 1, 2017.The Patent has a ten (10) year life.The bonds mature December 31, 2023.The 6% bonds pay interest annually December 31.The market rate of interest January 1, 2017 was 8%.Packers uses the cost method to account for its investment.The testing for impairment as at December 31, 2020 yielded the following fair values (recoverable amount):

Patents$10,000

Goodwill15,000

The following are the financial statements of Packers Corp. and its subsidiary Seahawks Ltd. as at December 31, 2020:

BALANCE SHEETS

As at December 31, 2020

Packers CorpSeahawks Ltd.

Cash$21,000$35,000

Accounts Receivable85,00055,000

Note receivable--35,000

Inventory65,00065,000

Equipment (net)180,000140,000

Land135,00060,000

Investment in Seahawks (cost method)144,000--

$630,000$390,000

Bank Loan Payable$75,000$--

Accounts Payable98,00015,000

Bond Payable--100,000

Note Payable35,000--

Common Shares150,00080,000

Retained Earnings272,000195,000

$630,000$390,000

STATEMENTS OF INCOME AND RETAINED EARNINGS

Year ended December 31, 2020

Packers Corp.Seahawks Ltd.

Sales$861,750$380,000

Investment income10,0005,000

Dividend Income27,000_

$898,750$385,000

Cost of Sales520,000230,000

Amortization expense-equipment50,00015,000

Interest expense25,00015,000

Miscellaneous expenses95,00025,000

Income Taxes88,00040,000

778,000325,000

Net Income120,75060,000

Retained earnings,

Beginning of year181,250165,000

Dividends declared(30,000)(30,000)

Retained earnings, Dec 31, 20120$272,000$195,000

Other information:

The notes payable are intercompany and are non-interest bearing.

REQUIRED:

a)Calculate and allocate acquisition differential.

b)Prepare an amortization schedule of acquisition differential to December 31, 2020

Show all calculations.

c)Prepare Consolidated Income Statement for the year ended December 31, 2020

Show your calculation for consolidated net income

d)Calculate Consolidated Retained Earnings at January 1, 2020

e)Prepare Consolidated Statement of Retained Earnings for year ended December 31, 2020

f)Prepare Consolidated Balance Sheet at December 31, 2020.