On January 1, 2017. Travers Company acquired 90 percent of Yarrow Company's outstanding stock for $846,000. The 10 percent noncontrolling interest had an assessed fair value of $94,000 on that date. Any acquisition-date excess fair value over book value was attributed to an unrecorded customer list developed by Yarrow with a remaining life of 15 years. On the same date. Yarrow acquired an 80 percent interest in Stookey Company for $456,000. At the acquisition date, the 20 percent noncontrolling interest fair value was $114.000. Any excess fair value was attributed to a fully amortized copyright that had a remaining life of 10 years. Although both investments are accounted for using the initial value method, neither Yarrow nor Stookey have distributed dividends since the acquisition date. Travers has a policy to deciare and pay cash dividends each year equal to 40 percent of its separate company operating earnings. Reported income totals for 2017 follow: Travers Company Yarrow Company Stookey Company $ 440,00 230,000 176,000 Following are the 2018 financial statements for these three companies. Stookey has transferred numerous amounts of inventory to Yarrow since the takeover amounting to $108.000 (2017) and $135.000 (2018). These transactions include the same markup applicable to Stookey's outside sales. In each year. Yarrow carried 20 percent of this inventory Into the succeeding year before disposing of it. An effective tax rate of 40 percent is applicable to all companies. All dividend declarations are paid in the same period. Travers Yarrow Stookey Company Company Company Sales 5(1,0,0) (787,80) $ (528,000) Cost of goods sold 554,200 377.ee 316,30 Operating expenses 115.de 195,500 Net Income $(370, dee) 5 (236,400) 5 (105,500) Retained earnings, 1/1/18 $ (840,00 5 (709,200) $ (426.000 Net Income (above) (370,400 (236,400) (105, 600) Dividends declared 143160 Retained earnings, 12/31/18 $(1,062,240) $(945.600) $ (531,660) Current assets 529,00 448,600 $ 354,700 Investment in Yarrow Company 846,00 Investment in Stookey Company 456. Land, buildings, and equipment (net) 3115 511. Total assets $ 2,491,000 $ 1,768,600 $ 66,500 Liabilities $ (920,760) $ (506,200 5 (134,700) Common stock (500,000) (316, (200,00) Retained earnings, 12/31/18 1,062,240) Total liabilities and equities $(2,491,000) $(1,763.600) $ (66,100) 5 $ Note: Parentheses Indicate a credit balance a. Prepare the business combination's 2018 consolidation worksheet ignore income tax effects b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018 c. Determine the amount of Stookey's income tax on a separate tax return for 2018 d. Based on the answers to requirements (b) and (cl. what journal entry does this combination make to record 2018 income tax? Note: Parentheses indicate a credit balance a. Prepare the business combination's 2018 consolidation worksheet ignore income tax effects b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018 c. Determine the amount of Stookey's income tax on a separate tax return for 2018 d. Based on the answers to requirements (D) and (c) what journal entry does this combination make to record 2018 income tax? Complete this question by entering your answers in the tabs below. Req A Red Band Reg D Prepare the business combination's 2018 consolidation worksheet: ignore income tax effects. (For accounts where multiple consolidation entries are requin el debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and ent in the credit column of the worksheet. Amounts in the Debit and credit columns should be entered as positive. Negative amounts for the Noncontrolling in Consolidated Totals columns should be entered with a minus sign. Round your answers to nearest whole dollar amount.) TRAVERS COMPANY AND CONSOLIDATED SUBSIDIARIES Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Travers Yarrow Stockey Cred Company Company Company (1.040,000) (707800) (528,000 584 200 377.400 316.800 115.400 04.000 105,000 (370.400) (238.4001 (105.000 Noncontrolling Consolidated Balance Accounts (840,000) (709.200 (420.000) (105.600) (230.400) Sales and other revenue Cost of goods sold Operating expenses Separate company net income Consolidated net income Net income attributable to NCI (Yarrow) Net income tributable to NCI (Stookey) Net income attributable to Travers Company Retained earnings, 1/1/18 Travers Company Yarrow Company Stookey Company Net Income (above) Dividends declared Retained earnings 12/31/18 Current assets Investment in Yarrow Company Investment in Stookey Company Land, buildings. & equipment (net) Copyright Customers Total assets Liabilities Common stock Retained earnings. 12/31/18 (above) NCI interest in Stookey 1/1/18 Noncontrolling interest in Yarrow, 11/10 Noncontrolling interests in subsidiaries Total abilities and equites (370.400) 148.100 (1,062.240) 529.400 840.000 (045.600 448.000 (531.600) 354.700 450,000 854.000 1.115.500 511.600 2.401.000 (928,780) 500,000) (1.062.240 1.700.000 (500 200 (310.800 (045.600 860,300 (134700) (200.000) (531.000) (2.401,000) (1.708.600 (866.300 Note: Parentheses indicate a credit balance. a. Prepare the business combination's 2018 consolidation worksheet, ignore income tax effects. b. Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for 2018 e. Determine the amount of Stookey's income tax on a separate tax return for 2018. d. Based on the answers to requirements (b) and (c). what journal entry does this combination make to record 2018 income tax? Complete this question by entering your answers in the tabs below. Reg A Reg B and c Red D Based on the answers to requirements (b) and (c), what journal entry does this combination make to record 2018 income tax? (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the income tax payable. Note: Enter debits before credits Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Reg A Reg B and C Reg D Based on the answers to requirements (b) and (c), what journal entry does this combination make to record 2018 income tax? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the income tax payable. Note: Enter debits before credits Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal