On January 1, 2019, Parflex Corporation exchanged $344,000 cash for 90 percent of Eagle Corporation's outstanding voting stock. Eagle's acquisition date balance sheet follows: Cash and receivables Inventory Property and equipment (net) $ 15,000 35,000 350,000 $ 400,000 Liabilities Common stock Retained earnings $ 76,000 150,000 174,000 $ 400,000 On January 1, 2019, Parflex prepared the following fair-value allocation schedule: Consideration transferred by Parflex 10% noncontrolling interest fair value Fair value of Eagle Book value of Eagle Excess fair over book value to equipment (undervalued, remaining life of 9 years) to goodwill (indefinite life) $344,000 36,000 380,000 324,000 56,000 18,000 $ 38,000 The companies' financial statements for the year ending December 31, 2021, follow: $ Sales Cost of goods sold Depreciation expense Equity in Eagle's earnings Separate company net income Parflex (862,000) 515,000 191,200 (79,200) (235,000) Eagle $ (366,000) 209,000 67,000 0 $ (90,000) $ $ Retained earnings 1/1 Net income (500,000) (235,000) $ (278,000) (90,000) $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (500,000) (235,000) 130,000 (605,000) $ (278,000) (90,000) 27,000 $ (341,000) $ Cash and receivables Inventory Investment in Eagle Property and equipment (net) Total assets $ 135,000 255,000 488,900 964,000 $ 1,842,900 $ 82,000 136,000 0 328,000 $ 546,000 Liabilities Common stock-Parflex Common stock-Eagle Retained earnings 12/31 Total liabilities and owners (722,900) (515,000) 0 (605,000) $ (1,842,900) $ (55,000) 0 (150,000) (341,000). $ (546,000) equity At year-end, there were no intra-entity receivables or payables. a. Compute the goodwill allocation to the controlling and noncontrolling interest. b. Show how Parflex determined its Investment in Eagle account balance. c. Determine the amounts that should appear on Parflex's December 31, 2021, consolidated statement of financial position and its 2021 consolidated income statement. Initial value $ 344,000 2019-2020 change in Eagle's RE Excess fair value amortization Equity income 2021 Eagle 2021 dividends Investment in Eagle 12/31/21 $ 344,000 PARFLEX CORPORATION AND EAGLE CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Adjustments & Elimination Eagle Debit Credit Noncontrolling Consolidated December 31, 2021 Parflex Interest Totals Sales $ (862,000) $ 515,000 191,200 (79,200) (235,000) $ (366,000) 209,000 67,000 0 $ (90,000) $ Cost of goods sold Depreciation expense Equity in Eagle's earnings Separate company net income Consolidated net income to noncontrolling interest to Parflex Corporation Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 Cash and receivables Inventory Investment in Eagle Property & equipment (net) Goodwill $ (500,000) $ (278,000) (235,000) (90,000) 130,000 27,000 (605,000) $ (341,000) 135,000 $ 82,000 255,000 136,000 488,900 0 964,000 328,000 $ Total assets $ Liabilities $ 1,842,900 $ (722,900) $ (515,000) 546,000 (55,000) (150,000) Common stock NCI 1/1 0 NCI 12/31 Retained earnings 12/31 Total liabilities and equities (605,000) (341,000) $ (1,842,900) $ (546,000) 0 0 On January 1, 2019, Parflex Corporation exchanged $344,000 cash for 90 percent of Eagle Corporation's outstanding voting stock. Eagle's acquisition date balance sheet follows: Cash and receivables Inventory Property and equipment (net) $ 15,000 35,000 350,000 $ 400,000 Liabilities Common stock Retained earnings $ 76,000 150,000 174,000 $ 400,000 On January 1, 2019, Parflex prepared the following fair-value allocation schedule: Consideration transferred by Parflex 10% noncontrolling interest fair value Fair value of Eagle Book value of Eagle Excess fair over book value to equipment (undervalued, remaining life of 9 years) to goodwill (indefinite life) $344,000 36,000 380,000 324,000 56,000 18,000 $ 38,000 The companies' financial statements for the year ending December 31, 2021, follow: $ Sales Cost of goods sold Depreciation expense Equity in Eagle's earnings Separate company net income Parflex (862,000) 515,000 191,200 (79,200) (235,000) Eagle $ (366,000) 209,000 67,000 0 $ (90,000) $ $ Retained earnings 1/1 Net income (500,000) (235,000) $ (278,000) (90,000) $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (500,000) (235,000) 130,000 (605,000) $ (278,000) (90,000) 27,000 $ (341,000) $ Cash and receivables Inventory Investment in Eagle Property and equipment (net) Total assets $ 135,000 255,000 488,900 964,000 $ 1,842,900 $ 82,000 136,000 0 328,000 $ 546,000 Liabilities Common stock-Parflex Common stock-Eagle Retained earnings 12/31 Total liabilities and owners (722,900) (515,000) 0 (605,000) $ (1,842,900) $ (55,000) 0 (150,000) (341,000). $ (546,000) equity At year-end, there were no intra-entity receivables or payables. a. Compute the goodwill allocation to the controlling and noncontrolling interest. b. Show how Parflex determined its Investment in Eagle account balance. c. Determine the amounts that should appear on Parflex's December 31, 2021, consolidated statement of financial position and its 2021 consolidated income statement. Initial value $ 344,000 2019-2020 change in Eagle's RE Excess fair value amortization Equity income 2021 Eagle 2021 dividends Investment in Eagle 12/31/21 $ 344,000 PARFLEX CORPORATION AND EAGLE CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Adjustments & Elimination Eagle Debit Credit Noncontrolling Consolidated December 31, 2021 Parflex Interest Totals Sales $ (862,000) $ 515,000 191,200 (79,200) (235,000) $ (366,000) 209,000 67,000 0 $ (90,000) $ Cost of goods sold Depreciation expense Equity in Eagle's earnings Separate company net income Consolidated net income to noncontrolling interest to Parflex Corporation Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 Cash and receivables Inventory Investment in Eagle Property & equipment (net) Goodwill $ (500,000) $ (278,000) (235,000) (90,000) 130,000 27,000 (605,000) $ (341,000) 135,000 $ 82,000 255,000 136,000 488,900 0 964,000 328,000 $ Total assets $ Liabilities $ 1,842,900 $ (722,900) $ (515,000) 546,000 (55,000) (150,000) Common stock NCI 1/1 0 NCI 12/31 Retained earnings 12/31 Total liabilities and equities (605,000) (341,000) $ (1,842,900) $ (546,000) 0 0