On January 1, 2021, Waddington Company acquired Middleton Co. by issuing 55,000 shares of its common Stock with a market value of $20 per share. A building on subs books was undervalued by $100,000, resulting in annual amortization of $10,000. Also, there was an unrecorded customer list valued at $150,000, resulting in annual amortization of $15,000; as well as a 10-year franchise agreement valued at $125,000. The separate 2021 financial statements for Waddington and Middleton follow.

	Waddington	Middleton
Sales revenue	$3,600,000	$ 975,000
Cost of goods sold	(2,520,000)	(585,000)
Gross profit	1,080,000	390,000
Operating expenses	(684,000)	(253,500)
Equity income	99,000	_
Net Income	$ 495,000	$ 136,500
Retained Earnings, 1/1/21	$1,830,500	$ 503,750
Net income	495,000	136,500
Dividends	(32,040)	(20,475)
Retained Earnings, 12/31/21	$2,293,460	$ 619,775
Cash and receivables	$ 772,275	$ 477,425
Inventory	698,400	290,550
Equity investment	1,178,525
Property, plant & equipment (Net)	3,719,520	537,550
Total Assets	$6,368,720	$1,305,525
Accounts payable	$ 263,520	$ 92,950
Accrued liabilities	313,200	121,550
Notes payable	1,250,000	325,000
Common stock	407,000	65,000
Additional paid-in capital	1,824,040	81,250
Retained Earnings, 12/31/11	2,293,400	619,775
Total Liabilities and Equities	$6,368,720	$1,305,525

1. Prepare FV allocation schedule
2. Prepare all necessary consolidation entries for 2021 consolidated financial statements.
3. Now assume that at year-end a goodwill impairment test is conducted before the consolidated statements are issued. The estimated fair value of the subsidiary is $1,100,000. The fair value of the identifiable net assets is $1,050,000. Prepare any journal entries resulting from the test.