On January 1, Paisley, Inc. paid $560,000 cash for all of Skyler Corporations outstanding common stock. At the acquisition date, the book value of Skylers net assets was $450,000 and the book values of all assets and liabilities were equal to their fair values. Any excess fair value was assigned to an intangible asset and will be amortized over 10 years. Paisley accounts for its investment in Skyler using the Initial Value Method. During the year, Skyler sold inventory costing $60,000 to Paisley for $90,000. At the end of the year, $18,000 (transfer price e.g., price Paisley paid) of inventory had not yet been resold to outside parties. Also, at the end of the year, Paisley continues to owe Skyler $28,000 (transfer price) for the last shipment of inventory. Also, on January 2, Paisley sold Skyler equipment for $20,000. The equipment had a carrying value of $12,000 and an original cost of $30,000. Both companies depreciate such property according to the straight-line method with no salvage value. The remaining useful life of the equipment on January 2 was 4 years.

Prepare all Consolidation Entries required for Paisley, Inc., Consolidated as of December 31. 2. Post the Consolidation Entries to the Paisley and Skyler worksheet as of December 31. 3. Complete any necessary Excel formulas to complete the consolidated financial totals for this business combination as of December 31.