On January 1, 2020, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,344,500 in cash and securities. On the acquisition date, Stylene had the following balance sheet:

Cash	$	31,000	Accounts payable	$	1,564,000
Accounts receivable		105,000
Inventory		144,000
Equipment (net)		1,930,000	Common stock		800,000
Trademarks		1,026,000	Retained earnings		872,000
Total assets	$	3,236,000	Total liabilities and equity	$	3,236,000

At the acquisition date, the book values of Stylenes assets and liabilities were generally equivalent to their fair values except for the following assets:

Asset	Book Value		Fair Value		Remaining Useful Life
Equipment	$	1,930,000	$	2,050,000	8 years
Customer lists		0		257,000	4 years
Trademarks		1,026,000		1,117,500	indefinite

During the next two years, Stylene has the following income and dividends in its own separately prepared financial reports to its parent.

	Net Income		Dividends
2020	$	264,000	$	25,000
2021		534,000		45,000

Dividends are declared and paid in the same period. The December 31, 2021, separate financial statements for each company follow. Parentheses indicate credit balances.

	Prestige				Stylene
Income Statement
Revenues	$	(5,580,000	)		$	(3,264,000	)
Cost of goods sold		2,990,000				2,310,000
Depreciation expense		544,000				420,000
Amortization expense		199,000				0
Equity earnings in Stylene		(454,750	)			0
Net income	$	(2,301,750	)		$	(534,000	)
Statement of Retained Earnings
Retained earnings 1/1	$	(3,490,000	)		$	(1,111,000	)
Net income (above)		(2,301,750	)			(534,000	)
Dividends declared		150,000				45,000
Retained earnings 12/31	$	(5,641,750	)		$	(1,600,000	)
Balance Sheet
Cash	$	472,000			$	66,000
Accounts receivable		766,000				76,000
Inventory		986,000				494,000
Investment in Stylene		2,914,000				0
Equipment		6,240,000				2,032,500
Customer lists		198,000				0
Trademarks		2,970,000				944,000
Goodwill		260,000				0
Total assets	$	14,806,000			$	3,612,500
Accounts payable	$	(664,250	)		$	(1,212,500	)
Common stock		(8,500,000	)			(800,000	)
Retained earnings, 12/31		(5,641,750	)			(1,600,000	)
Total liabilities and equity	$	(14,806,000	)		$	(3,612,500	)

1. Determine the fair value in excess of book value for Prestiges acquisition date investment in Stylene.

2. Determine Prestige's December 31, 2021, Investment in Stylene balance.

3. Prepare a worksheet to determine the balances for Prestiges December 31, 2021, consolidated financial statements.

Complete this question by entering your answers in the tabs below. Required A Required B Required C Required B Determine the fair value in excess of book value for Prestige's acquisition date investment in Stylene. Fair value in excess of book value Complete this question by entering your answers in the tabs below. Required A Required B Required C Determine Prestige's December 31, 2021, Investment in Stylene balance. Amounts Investment in Stylene MULUUTIS Presuyu VEUIL vuit Totals Income Statement Sales Cost of goods sold Depreciation expense Amortization expense Equity earnings in Stylene Net income $ (5,580,000) $ (3,264,000) 2,990,000 2,310,000 544,000 420,000 199,000 0 (454,750) 0 S (2,301,750) $ (534,000) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (3,490,000) (1,111,000) (2,301,750) (534,000) 150,000 45,000 $ (5,641,750) $ (1,600,000) Balance Sheet Cash Accounts receivable Inventory Investment in Stylene Equipment (net) Customer lists Trademarks Goodwill Total assets $ 472,000 $ 66,000 766,000 76,000 986,000 494,000 2,914,000 0 6,240,000 2,032,500 198,000 0 2,970,000 944,000 260,000 0 $ 14,806,000 $ 3,612,500 Accounts payable Common stock - Prestige Common stock - Stylene Retained earnings 12/31 Total liabilities and equity (664,250) (1,212,500) (8,500,000) (800,000) (5,641,750) (1,600,000) $(14,806,000) $ (3,612,500)