On January 1, 2024, Biggie Company, a US-based corporation, bought a 55% interest in Small Company, a company based in Spain. Small became a subsidiary of Biggie Company on that day. Biggie paid for the transaction with cash (in US dollars) and by issuing shares of its own common stock (par value $1.00 per share). The book values of Smalls net assets equal the fair values, except as noted on the spreadsheet that accompanies this document.

The following additional information related to these companies:

• There was no control premium in this transaction.
• Small maintains its records in euros, its functional currency, and applies IFRS for financial reporting purposes. Biggie applies US GAAP for financial reporting purposes.
• There are no differences between US GAAP and IFRS for Smalls financial statements, except the depreciation method of the buildings. Biggies uses straight line method and depreciations the building as a whole over a 40-year life. Small applies the component depreciation method with three components the structure (40-year life), the interior (20-year life), and the roof (10-year life).
• Small issued its common stock on January 1, 2023, purchased its building on January 1, 2024, purchased its equipment on June 30, 2024, and paid dividends on June 30, 2024. Its expenses were incurred evenly throughout the year.

The separate financial statements as of December 31, 2024, along with other details about the accounts and balances are presented in the spreadsheet template that accompanies this problem.

Required (answer all parts and show your work on the spreadsheet template):

1. Prepare a conversion worksheet to convert Smalls financial statements from IFRS to US GAAP.
2. Prepare a worksheet to translate Small's financial statements from euros to US dollars at December 31, 2024.
3. Prepare a schedule on January 1, 2024, to determine goodwill and the amortization and allocation amounts for Biggies purchase of Small.
4. Prepare the consolidation worksheet entries in general journal form for this business combination as of December 31, 2024. Be sure to label your entries with the appropriate letters (S, A, etc.). Show your work.
5. Prepare the consolidated worksheet as of December 31, 2024.
6. Prepare consolidated worksheet entry A if the year-end was December 31, 2026, rather than 2024. Assume the subsidiary was still purchased on January 1, 2024.
7. Independent of #6, assume that a qualitative assessment of goodwill shows that goodwill may be impaired. Perform the quantitative assessment and prepare any necessary journal entries, if any, to record goodwill impairment if the fair value of Smalls net assets at December 31, 2024, is as noted on the spreadsheet.