On January 3, 2016, Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc. in exchange for $9,912,000 in cash. Persoff elected to exercise control over Sea Cliff as a wholly owned subsidiary with an independent accounting system. Both companies have December 31 fiscal year-ends. At the acquisition date, Sea Cliffs stockholders equity was $2,632,000 including retained earnings of $1,832,000.

Persoff pursued the acquisition, in part, to utilize Sea Cliffs technology and computer software. These items had fair values that differed from their values on Sea Cliffs books as follows:

Remaining Useful Life Fair Value Book Value $200,000 Patented technology Computer software 3,140, 000 4,176, 000 years 12 years 96,000 Sea Cliff's remaining identifiable assets and liabilities had acquisition-date book values that closely approximated fair values. Since acquisition, no assets have been impaired. During the next three years, Sea Cliff reported the following income and dividends: Net Income Dividends 2016 2017 2018 902,400 942,400 977 400 $150,000 150, 000 150, 000 December 31, 2018, financial statements for each company appear below. Parentheses indicate credit balances. Dividends declared were paid in the same period. Persoff sea cliff $(2,960,000) $(2,370,000) Cost of goods sold Depreciation expense Anortization expense Equity earnings in Sea Cliff Net income 1,467, 600 335, 000 442,000 217,400 932, 800 915,600 428, 000 49, 000 977,400) Statement of Retained Earning Retained earnings 1/1 Net income (above) Dividends declared $7,590,000) (932, 800 600,000 $3,376,800 977,400 150, 000 Retained earnings 12/31 ,922,800 (4,204,200 Balance Shcet 598, 000 10,004,200 420, 000 944,000 435, 000 Investnent in Sea Cliff Computer software Patented technology Goodwill Equipment Total assets 81,000 128, 00 148, 00 1,919,000 $14,033,200 $4,110,400 7,922, 800 $ 14,033,200 4,740,000 S,384, 000 (379,800 4,204,200 (5,384,000 Liabilities Common stock Retained earnings 12/31 (2,000, 000) (800, 000) Total liabilities and equity Note: Parentheses indicate a credit balance a. Determine the fair value in excess of book value for Persoffs acquisition date investment in Sea Cliff. b. Determine Persoffs Equity earnings in Sea Cliff's balance for the year ended December 31, 2018. c. Determine Persoff's December 31, 2018, Investment in Sea Cliff's balance d. Prepare a worksheet to determine the consolidated values to be reported on Persoff's financial statements