On January 1, 2020, P company acquires 90 percent of the outstaniding common stock of S company, in exchange for $1,710,000 cash. At the acquisition date, Scompany's total fair value, including the noncontrolling interest, was assessed at $1,900,000. Also at the acquisition date, S company's book value was $725,000.(common stock 400,000, additional paid-in capital 60,000, retained earnings 265,000) P company observed that S company had developed internally a customer base with an assed fair value of $800,000 that was not reflected on Scompany's books. The remaining useful life of cutomer base is ten years. Book value Fair value Customer base 0 800000 For internal reporting purposes, P company employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2020, for both companies. At year-end, there were no intra-entity receivables or payables. P company S company ($120,000) ($120,000) 40,000 40,000 Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Gardena Net income ($121,500) ($ 437,000) ($215,000) Retained earnings (1/1/2020) Net income Dividends declared Retained earnings (12/31/2020) ($330,000) ($ 437,000) 350,000 ($265,000) ($215,000) 25,000 1,854,000 0 Current assets Investment in Scompany Trademark Property and equipment (net) Patents Total assets Accounts payable Common stock Additional paid-in capital Retained earnings (12/31/2020) Total liabilities and equities ($900,000) ($300,000) ($400,000) ($ 60,000) 1. What is the goodwill recorded at the time of acqusition? Your answer: fair value of sub-book value of sub- undervalued FV of customer base 2.What is the amount of Non-Controlling Interest at acquisition (1/1/2020)? Your answer: $ 190,000 fair value of subsidary=fair value of controlling interest+fair value of non-controlling interest 1,900,000 =17100000+x 3. The consolidation JE D to eliminate any dividend earned from Subsidiary during 2020 (consolidation JED) Your answer: Cr. Dr. 4. The consolidation JE S to eliminate subsidiary's stockholders' equity at December 31, 2020 (consolidation JES) Your answer: Dr. Cr