On January 1, 2021, Petterson, Inc. purchased 75% of singer company for $600000. At the acquisition date, singers total fair market value, including non controlling interest was assessed at $800000. At the acquisition date, singer's book value was $700000. Several individual items on singer's January 1, 2021 financial report had fair market values different from book values, as follows: Equipment 5 year remaining life book value $250000, fair market value $300000 Patents four year remaining life book value $104000, fair market value $120000. Peterson uses the equity method to count for investments. At the end of 2021, there are no receivables or payables between the companies. 1) Prepare fair value allocation as of January 1, 2021. 2) Prepare consolidated journal entries for December 31, 2021. 3) Prepare consolidated worksheet for December 31, 2021.

Worksheet #2 For year ended December 31, 2021 Adjustments & Elimination Entries Petterson Singer Dr Ref Cr NCI Consolidated Income Statement Sales (1,300,000) (500,000) Cost of Goods Sold 850,000 300,000 Depreciation Expense 300,000 25.300 Amortization Expense 28,000 Equity Income in Singer (99,525) Net Income 249,525) 146,700) Statement of Retained Earnings Retained Earnings - Jan 1, 2021 (1,275,000) (400,000) Net Income (249,525) (146,700) Dividends 250,000 40,000 Retained Earnings - Dec 31, 2021 (1,274,525) (506,700) Balance Sheet Current Assets 860,000 321,700 5 Investment in Singer 669.525 Land 240,000 210,000 Patent 80,000 Equipment, net 1,030,000 240,000 Goodwill 0 Total Assets 2,799,525 851,700 Liabilities (225,000) (45,000) Common Stock - Petterson (300,000) Additional Paid in Cap - Petterson (1,000,000) Retained Earnings - Petterson (1,274,525) Common Stock - Singer (100,000) Addl Paid in Cap - Singer (200,000) Retained Earnings Singer (506, 700 NCI Interest Total Liab & StkEquity 2,799,525) 851,700