On January 1, 2023, Payne Company bought a 15 percent interest in Scout Company. The acquisition price of $208,500 reflected an assessment that all of Scouts accounts were fairly valued within the companys accounting records. During 2023, Scout reported net income of $112,800 and declared cash dividends of $33,700. Payne possessed the ability to significantly influence Scouts operations and, therefore, accounted for this investment using the equity method.

On January 1, 2024, Payne acquired an additional 80 percent interest in Scout and provided the following fair-value assessments of Scouts ownership components:

Consideration transferred by Payne for 80% interest

$ 1,425,600

Fair value of Payne's 15% previous ownership

267,300

Noncontrolling interest's 5% fair value

89,100

Total acquisition-date fair value for Scout Company

$ 1,782,000

Also, as of January 1, 2024, Payne assessed a $420,000 value to an unrecorded database internally developed by Scout. The database is anticipated to have a remaining life of four years. Scouts other assets and liabilities were judged to have fair values equal to their book values. Payne elects to continue applying the equity method to this investment for internal reporting purposes.

At December 31, 2024, the following financial information is available for consolidation:

Required: ( PLEASE ANSWER ALL )

a. How should Payne allocate Scouts total acquisition-date fair value (January 1, 2024) to the assets acquired and liabilities assumed for consolidation purposes?

b-1. Calculate the Equity in earnings of Scout in Payne's pre-consolidation 2024 statements.

b-2. Calculate the Gain on revaluation of Investment in Scout to fair value in Payne's pre-consolidation 2024 statements.

b-3. Calculate the Investment in Scout in Payne's pre-consolidation 2024 statements.

c. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2024.

At year-end, there were no intra-entity receivables or payables.

a. How should Payne allocate Scout's total acquisition-date fair value (January 1, 2024) to the assets acquired and liabilities assumed for consolidation purposes? b-1. Calculate the Equity in earnings of Scout in Payne's pre-consolidation 2024 statements. b-2. Calculate the Gain on revaluation of Investment in Scout to fair value in Payne's pre-consolidation 2024 statements. b-3. Calculate the Investment in Scout in Payne's pre-consolidation 2024 statements. c. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2024. At year-end, there were no intra-entity receivables or payables. Complete this question by entering your answers in the tabs below. How should Payne allocate Scout's total acquisition-date fair value (January 1, 2024) to the assets acquired and liabilities assumed for consolidation purposes? Prepare a worksheet to consolidate the financial statements of these two companies as of December 31,2024. At year-end, there were no intra-entity recelvables or payables. Note: For accounts where mulitiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values. a. How should Payne allocate Scout's total acquisition-date fair value (January 1,2024 ) to the assets acquired and liabilities assumed for consolidation purposes? b-1. Calculate the Equity in earnings of Scout in Payne's pre-consolidation 2024 statements. b-2. Calculate the Gain on revaluation of Investment in Scout to fair value in Payne's pre-consolidation 2024 statements. b-3. Calculate the Investment in Scout in Payne's pre-consolidation 2024 statements. c. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2024. At year-end, there were no intra-entity receivables or payables. a. How should Payne allocate Scout's total acquisition-date fair value (January 1,2024 ) to the assets acquired and liabilities assum for consolidation purposes? b-1. Calculate the Equity in earnings of Scout in Payne's pre-consolidation 2024 statements. b-2. Calculate the Gain on revaluation of Investment in Scout to fair value in Payne's pre-consolidation 2024 statements. b-3. Calculate the Investment in Scout in Payne's pre-consolidation 2024 statements. c. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2024. At year-end, there were no intra-entity receivables or payables. Complete this question by entering your answers in the tabs below. Calculate the Investment in Scout in Payne's pre-consolidation 2024 statements. On January 1, 2023, Payne Company bought a 15 percent interest in Scout Company. The acquisition price of $208,500 reflected an assessment that all of Scout's accounts were fairly valued within the company's accounting records. During 2023, Scout reported net income of $112,800 and declared cash dividends of $33,700. Payne possessed the ability to significantly influence Scout's operations and, therefore, accounted for this investment using the equity method. On January 1.2024, Payne acquired an additional 80 percent interest in Scout and provided the following fair-value assessments of Scout's ownership components: Also, as of January 1, 2024, Payne assessed a $420,000 value to an unrecorded database internally developed by Scout. The database is anticipated to have a remaining life of four years. Scout's other assets and liabilities were judged to have fair values equal to their book values. Payne elects to continue applying the equity method to this investment for internal reporting purposes. At December 31,2024 , the following financial information is available for consolidation: a. How should Payne allocate Scout's total acquisition-date fair value (January 1, 2024) to the assets acquired and liabilities assume for consolidation purposes? b-1. Calculate the Equity in earnings of Scout in Payne's pre-consolidation 2024 statements. b-2. Calculate the Gain on revaluation of Investment in Scout to fair value in Payne's pre-consolidation 2024 statements. b-3. Calculate the Investment in Scout in Payne's pre-consolidation 2024 statements. c. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2024. At year-end, there were no intra-entity receivables or payables. Complete this question by entering your answers in the tabs below. Calculate the Gain on revaluation of Investment in Scout to fair value in Payne's pre-consolidation 2024 statements. a. How should Payne allocate Scout's total acquisition-date fair value (January 1,2024) to the assets acquired and liabilities assumed for consolidation purposes? b-1. Calculate the Equity in earnings of Scout in Payne's pre-consolidation 2024 statements. b-2. Calculate the Gain on revaluation of Investment in Scout to fair value in Payne's pre-consolidation 2024 statements. b-3. Calculate the Investment in Scout in Payne's pre-consolidation 2024 statements. c. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2024. At year-end, there were no intra-entity recelvables or payables. Complete this question by entering your answers in the tabs below. Calculate the Equity in earnings of Scout in Payne's pre-consolidation 2024 statements