On January 3, 2018, Ropper acquired all of the outstanding voting stock of Parker in exchange or $3,000,000 in cash. Ropper elected to exercise control over Parker as a wholly owned subsidiary with an independent accounting system. Both companies have December 31 year ends. At the acquisition date, Parker stockholder's equity was $2,500,000, including retained earnings of $1,700,000. Ropper pursued the acquisition, in part to utilize Parker's technology and computer software. These items had air values that differed from their values on Parker's books as follows: Remaining Life Asset Book Value Fair Value Patented technology $ 140,000 $ 2.240,000 7 years Computer software 60,000 $ 1.260,000 12 years At December 31 2020, Parker owes Ropper $70,000. Parker's remaining identifiable assets and liabilities had acquisiiton-date book values that closely approximated fair values. Since acquisition, no assts have been impaired. During the next three years, Parker reported the following income and dividends, which were paid: Net income Dividends 2018 5 2019 $ 2020 $ 900,000 $150,000 940,000 $ 150,000 975,000 $ 150,000 REQUIRED: LABEL EACH STEP 1 3 4 Prepare the analysis as of acquisition date including unamorfized diferential at 1/1/18 and through 2020. Calculate the balance in the account Investment in Parker as of 12/31/20. Show all computations. Prepare the journal entries Ropper recorded with respect to its investment in Parker for the year ended 12/31/20. Calculate consolidated net income (Total Net Income) for 2020 Prepare all necessary elimination entries for the year ended 2020. Complete the consolidated workpapers for the year ended 12/31/20. P CO. SCO. CONS TOT. ELIMINATIONS DR. CR. INCOME STATEMENT FYE 12/31/20 (000's) Sales Equity in sub earnings 2250 2,720 575 4,970 575 0 5,545 Total revenues 3.295 2250 Cost of goods sold Depreciation expense Amortization expense 1,350 275 370 870 380 25 2.220 655 395 0 3,270 Total expenses 1,995 1275 Net income 1,300 975 2.275 RETAINED EARNINGS STATEMENT Retained Earnings 1/1 7,470 3.240 10,710 Net income 1,300 975 2,275 Dividends declared 600 150 750 Retained Earnings 12/31 8,170 4,065 12,235 BALANCE SHEET Current assets Computer software Patented technology Goodwill 490 300 800 100 375 45 80 865 345 880 100 0 6,335 7,165 0 0 1.835 4.500 Equipment Investment in sub 7,165 Total assets 10,690 5,000 15,690 Liabilities 520 135 Common stock 2.000 800 655 0 2,800 0 12,235 0 15,690 Retained earnings 8,170 4065 Total liabilities and equi 10,690 5,000 0 0 On January 3, 2018, Ropper acquired all of the outstanding voting stock of Parker in exchange or $3,000,000 in cash. Ropper elected to exercise control over Parker as a wholly owned subsidiary with an independent accounting system. Both companies have December 31 year ends. At the acquisition date, Parker stockholder's equity was $2,500,000, including retained earnings of $1,700,000. Ropper pursued the acquisition, in part to utilize Parker's technology and computer software. These items had air values that differed from their values on Parker's books as follows: Remaining Life Asset Book Value Fair Value Patented technology $ 140,000 $ 2.240,000 7 years Computer software 60,000 $ 1.260,000 12 years At December 31 2020, Parker owes Ropper $70,000. Parker's remaining identifiable assets and liabilities had acquisiiton-date book values that closely approximated fair values. Since acquisition, no assts have been impaired. During the next three years, Parker reported the following income and dividends, which were paid: Net income Dividends 2018 5 2019 $ 2020 $ 900,000 $150,000 940,000 $ 150,000 975,000 $ 150,000 REQUIRED: LABEL EACH STEP 1 3 4 Prepare the analysis as of acquisition date including unamorfized diferential at 1/1/18 and through 2020. Calculate the balance in the account Investment in Parker as of 12/31/20. Show all computations. Prepare the journal entries Ropper recorded with respect to its investment in Parker for the year ended 12/31/20. Calculate consolidated net income (Total Net Income) for 2020 Prepare all necessary elimination entries for the year ended 2020. Complete the consolidated workpapers for the year ended 12/31/20. P CO. SCO. CONS TOT. ELIMINATIONS DR. CR. INCOME STATEMENT FYE 12/31/20 (000's) Sales Equity in sub earnings 2250 2,720 575 4,970 575 0 5,545 Total revenues 3.295 2250 Cost of goods sold Depreciation expense Amortization expense 1,350 275 370 870 380 25 2.220 655 395 0 3,270 Total expenses 1,995 1275 Net income 1,300 975 2.275 RETAINED EARNINGS STATEMENT Retained Earnings 1/1 7,470 3.240 10,710 Net income 1,300 975 2,275 Dividends declared 600 150 750 Retained Earnings 12/31 8,170 4,065 12,235 BALANCE SHEET Current assets Computer software Patented technology Goodwill 490 300 800 100 375 45 80 865 345 880 100 0 6,335 7,165 0 0 1.835 4.500 Equipment Investment in sub 7,165 Total assets 10,690 5,000 15,690 Liabilities 520 135 Common stock 2.000 800 655 0 2,800 0 12,235 0 15,690 Retained earnings 8,170 4065 Total liabilities and equi 10,690 5,000 0 0