On January 2, 2016, Perpetual Industries acquired 80% of Sawyer Corporation's voting stock.

Total goodwill of $1,000,000 was recognized at the date of acquisition, allocated 435,00 in

the controlling interest and $150,000 to the noncontrolling interest. Sawyer's reported

assets and liabilities had book values that approximated fair value at the date of acquisition,

but it had previously unreported customer lists (5 year life, 5L) valued at $500,000.

It is now December 31, 2019, four years after the date of acquisition. Additional information

is as follows:

For 2019, Sawyer reported income of $500,000

Goodwill impairment for 2019 is $200,000

Sawyer sells merchandise to Perpetual at a markup of 20% interest rate. Perpetual's

beginning inventory for 2019 includes $300,000 in merchandise purchased from Sawyer.

Perpetual's ending inventory for 2019 includes $600,000 in merchandise purchased from

Sawyer. Total sales from Sawyer to Perpetual were 2,500,000.

1. Calculate 2019 equity in net income of Sawyer, reported on Perpetual's seprate book

And the 2019 noncontrolling interest in net income of Sawyer, reported on Perpetual's

consolidated financial statements. Use the schedule below for your answer.

Total

Equity in Net Income

Noncontrolling

Interest in Net income

Sawyer's reported net income 500,000 400,000

100,000

Revaluation:

2. Prepare the working paper entries made in consolidation at December 31, 2019, related to

the intercompany transactions.