On January 1, 2020, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,341,500 in cash and securities. On the acquisition date, Stylene had the following balance sheet: Accounts payable $ 1,854,900 Cash Accounts receivable Inventory Equipment (net) Trademarks Total assets $ 26,400 102,500 216,000 2,170,000 1,016,000 $ 3,530,900 Common stock 800,000 Retained earnings 876,000 Total liabilities and equity $ 3,530,900 At the acquisition date, the book values of Stylene's assets and liabilities were generally equivalent to their fair values except for the following assets: Asset Equipment Customer lists Trademarks Book Value $ 2,170,000 0 1,016,000 Fair Value $ 2,374,000 176,000 1,068,500 Remaining Useful Life 8 years 4 years indefinite During the next two years, Stylene has the following income and dividends in its own separately prepared financial reports to its parent. 2020 2021 Net Income $ 208,000 244,000 Dividends $ 25,000 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 $ (5,680,000) 3,040,000 542,000 130,000 (174,500 $ (2,142,500) $(2,284,000) 1,610,000 430,000 0 $ (244,000) Income Statement Revenues Cost goods sold Depreciation expense Amortization expense Equity earnings in Stylene Net income Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 Balance Sheet Cash Accounts receivable Inventory Investment in Stylene $ (3,140,000) (2,142,500) 150,000 $ (5,132,500) $(1,059,000) (244,000) 45,000 $(1,258,000) $ $ 588,000 748,000 913,000 2,584,500 75,000 89,500 616,000 0 1,717,500 864,000 Equipment Customer lists Trademarks Goodwill Total assets Accounts payable Common stock Retained earnings, 12/31 Total liabilities and equity 6,400,000 144,000 3,050,000 249,000 $ 14,676,500 $ (1,044,000) (8,500,000) (5,132,500) $(14,676,500) $ 3,362,000 $(1,304,000) (800,000) (1,258,000) $ (3,362,000) a. Determine the fair value in excess of book value for Prestige's acquisition date investment in Stylene. b. Determine Prestige's December 31, 2021, Investment in Stylene balance. c. Prepare a worksheet to determine the balances for Prestige's December 31, 2021, consolidated financial statements. Complete this question by entering your answers in the tabs below. Required A Required B Required Determine the fair value in excess of book value for Prestige's acquisition date investment in Stylene. Fair value in excess of book value Determine Prestige's December 31, 2021, Investment in Stylene balance. Amounts Investment in Stylene PRESTIGE CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year December 31, 2021 Consolidation Entries Accounts Prestige Stylene Debit Credit Consolidated Totals Income Statement Sales Cost of goods sold Depreciation expense Amortization expense Equity earnings in Stylene Net income $ (5,680,000) $ (2,284,000) 3,040,000 1,610,000 542,000 430,000 130,000 (174,500) 0 $ (2,142,500) $ (244,000) 0 Statement of Retained Earnings Retained earnings 171 Net income (above) Dividends declared Retained earnings 12/31 (3,140,000) (1,059,000) (2,142,500) (244,000) 150,000 45,000 $ (5,132,500) $ (1,258,000) Balance Sheet Cash Accounts receivable Inventory Investment in Stylene Equipment (net) Customer lists Trademarks Goodwill Total assets $ 588,000 $ 75,000 748,000 89,500 913,000 616,000 2,584,500 0 6,400,000 1,717,500 144,000 0 3,050,000 864,000 249,000 0 $ 14,676,500 $ 3,362,000 Accounts payable Common stock - Prestige Common stock - Stylene Retained earnings 12/31 Total liabilities and equity (1,044,000) (1,304,000) (8,500,000) (800,000) (5,132,500) (1,258,000) $(14.676,500) $ (3,362,000) $ 0 0