On January 1st. 2017, X Company bought 80% of the outstanding common shares of the Y Company for $140,000 cash. On that date Y Company had $50,000 of common shares outstanding and $60,000 retained earnings. On this date the book values of each of Ys identifiable assets and liabilities were equal to their fair values except for the following:- Book ValueFair Value Inventory..$60,000..$70,000 Patent..$20,000..$40,000 The patent had an estimated remaining useful life of 5 years. Goodwill arising from the purchase was tested annually for impairments. In 2018, $6,000 of goodwill impairment and in 2019 $6,000. In 2021, $2,400 impairment occurred. The following are the separate entity financial statements of the X & Y Companies at December 31st. 2021:- X & Y Balance Sheets December 31st.2021 Assets: X.Y Cash...........$160,000.$20,000 Accounts receivable.220,000180,000 Inventory.600,000240,000 Investment in Y 140,000.0 Equipment(net) 480,000..370,000 Patent..0. 4,000 TOTAL ASSETS:....$1,600,000..$814,000 Liabilities & Owners equity:- Accounts payable$ 500,000...$490,000 Future income Taxes 160,000 144,000 Common Shares. 340,000.. 50,000 Retained Earnings 600,000130,000 TOTAL LIABILITIES & OWNERS EQUITY..$ 1,600,000.$814,000 X&Y Statement of Income and Retained Earnings Year ended December 31st. 2021 X...Y Sales$1,800,000..$ 720,000 Cost of Goods Sold...( 680,000).(480,000) Gross Margin....... 1,120,000 240,000 Amortization expense..(60,000) (50,000) Other expenses(360,000)(110,000) Income tax expense(240,000)..(32,000) Net Income 460,000... 48,000 Retained Earnings, January 1st.2021 140,000 82,000 Retained Earnings, December 31st. 2021$600,000..$130,000 Additional Information:- i. On July 1st. 2018, X sold Y a piece of equipment with a net book value of $30,000 for cash consideration of $42,000. This equipment had a remaining useful life of 12 years and both companies use straight-line amortization. ii. During 2020, Y sold inventory to X for $72,000. Xs ending inventory at December 31st. 2020 included $9,100 of goods acquired from Y. Similarly during 2021, Y sold $130,000 of inventory to Y. Of these goods, 20% remained in Xs inventory at the end of December 31st. 2021.Y sells its inventories to X at a mark up of 30% on cost. iii. During 2020, X sold goods to Y from its inventory for $50,000 and in 2021 X sold to Y $60,000. All goods sold by X have a gross profit margin of 30% on the selling price. In 2020, $10,000 of the goods from X remained in Ys inventory and in 2021, 40% of the goods bought from X remained in Ys ending inventory. iii. Neither Company has ever paid dividends. iv. Both companies pay taxes at the rate of 40%. Required:- i. Calculate the consolidated net income for the year 2021(8 marks). ii. Prepare the eliminating entry(ies) at acquisition(4 marks). iii. Calculate the following balances as they would appear on the consolidated income statement for the year ending December 31st. 2021- a. Cost of Goods sold(3.5 marks). b. Amortization expense(1.5 marks). c. Income tax expenses(3 marks). d. Non-controlling interest(1 mark). iv. Calculate the following balances as they would appear on the consolidated balance sheet at December 31st.. 2021:- a. Inventory(1 mark) b. Equipment, net(1 mark) c. Future income taxes(1.5 marks) d. Patent(0.5 mark) e. Retained earnings(7 marks). v. Before an investor can present consolidated financial statements certain criteria must be present. List four of those criteria(4 marks). (MARKS ALLOCATED TO WORKING PAPERS14 MARKS)