On January 1, 2022, Protection Inc. purchased 60% of the outstanding shares of Safe Co. for $360,000. The balance sheets for both companies immediately after the transaction appear above.

Required:

A. Using the Entity theory (FVE method), calculate goodwill using fair values. The fair value of Safe Company inventory is $131,600, The fair value of inventory would then be $134,500. Please highlight the goodwill amount in yellow.

B. Calculate goodwill using net book values, including allocation of the acquisition differential. You must also calculate the value of non-controlling interest in this calculation. Please highlight the NCI amount in yellow.

C. Prepare a consolidated Statement of Financial Position. Your statement must be in good form as per the assignment submission guidelines. Marks will be deducted for poor presentation. Please note that the above balance sheets are for your information and are not considered to be good form.