On January 1, 2020, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2020, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners equity amounts in its balance sheet:

Common stock	$	400,000
Additional paid-in capital		60,000
Retained earnings		265,000

In determining its acquisition offer, Paloma noted that the values for San Marcos recorded assets and liabilities approximated their fair values. Paloma also observed that San Marco had developed internally a customer base with an assessed fair value of $800,000 that was not reflected on San Marcos books. Paloma expected both cost and revenue synergies from the combination.

At the acquisition date, Paloma prepared the following fair-value allocation schedule:

Fair value of San Marco Company	$	1,900,000
Book value of San Marco Company		725,000
Excess fair value		1,175,000
to customer base (10-year remaining life)		800,000
to goodwill	$	375,000

At December 31, 2021, the two companies report the following balances:

	Paloma				San Marco
Revenues	$	(1,843,000	)		$	(675,000	)
Cost of goods sold		1,100,000				322,000
Depreciation expense		125,000				120,000
Amortization expense		275,000				11,000
Interest expense		27,500				7,000
Equity in income of San Marco		(121,500	)			0
Net income	$	(437,000	)		$	(215,000	)
Retained earnings, 1/1	$	(2,625,000	)		$	(395,000	)
Net income		(437,000	)			(215,000	)
Dividends declared		350,000				25,000
Retained earnings, 12/31	$	(2,712,000	)		$	(585,000	)
Current assets	$	1,204,000			$	430,000
Investment in San Marco		1,854,000				0
Buildings and equipment		931,000				863,000
Copyrights		950,000				107,000
Total assets	$	4,939,000			$	1,400,000
Accounts payable	$	(485,000	)		$	(200,000	)
Notes payable		(542,000	)			(155,000	)
Common stock		(900,000	)			(400,000	)
Additional paid-in capital		(300,000	)			(60,000	)
Retained earnings, 12/31		(2,712,000	)			(585,000	)
Total liabilities and equities	$	(4,939,000	)		$	(1,400,000	)

At year-end, there were no intra-entity receivables or payables.

Determine the consolidated balances for this business combination as of December 31, 2021.

If instead the noncontrolling interests acquisition-date fair value is assessed at $167,500, what changes would be evident in the consolidated statements?

prepare a consoildated journal entrys