On January 4, 2020, Black Corporation acquired 100% of the outstanding shares of White Inc by a share-for-share exchange of its own shares, valued at $1,800,000. The statements of financial position of both companies just prior to the share exchange are as follows: Statement of Financial Position December 31, 2019 Black White Cash $ 100,000 $ 80,000 Accounts and other receivables 50,000 120,000 Inventories 110,000 150,000 Building and equipment 1,600,000 800,000 Accumulated depreciation - 800,000 - 400,000 Deferred charges - 120,000 $ 1,060,000 $ 870,000 Accounts and other payables $ 150,000 $ 80,000 Bonds payable - 300,000 Deferred income taxes 60,000 30,000 Common shares 750,000 250,000 Retained earnings 100,000 210,000 $ 1,060,000 $ 870,000 White had patents, not shown on the SFP, that had an estimated fair value of $225,000 and an estimated remaining productive life of 5 years. White's building and equipment had an estimated fair value of $100,000 in excess of carrying value, and the deferred charges were assumed to have a fair value of zero. White's buildings and equipment are being depreciated on the straight-line basis and have a remaining useful life of 20 years. The deferred charges are being amortized over 4 years. During 2020, the year following the acquisition, White borrowed $100,000 from Black; $50,000 is still outstanding at year-end. No interest is being charged on the loan. Through the year, White sold goods to Black totaling $300,000. White's gross margin is 40% of selling price; 45% of these goods were sold by Black to its customers, for $500,000. Dividend declarations amounted to $150,000 by Black and $100,000 by White. There were no other intercompany transactions. The year-end 2020 SFPs and SCIs for Black and White is as follows: Statements of Financial Position December 31, 2020 Black White Cash $ 150,000 $ 35,000 Accounts and other receivables 160,000 130,000 Inventories 200,000 205,000 Building and equipment 1,600,000 800,000 Accumulated depreciation - 900,000 - 450,000 Land - 100,000 Investment in Sub (at cost) 1,800,000 - Other investments 100,000 30,000 Deferred charges - 145,000 $ 3,110,000 $ 995,000 Accounts and other payables $ 180,000 $ 125,000 Bonds payable - 280,000 Deferred income taxes 80,000 50,000 Common shares 2,550,000 250,000 Retained earnings 300,000 290,000 $ 3,110,000 $ 995,000 Statements of Comprehensive Income Year Ended December 31, 2020 Black White Sales $ 2,500,000 $ 1,100,000 Dividend income 100,000 - 2,600,000 1,100,000 Cost of sales 1,600,000 650,000 Depreciation expense 100,000 50,000 Amortization expense - 20,000 Income tax expense 100,000 25,000 Other expenses 450,000 175,000 2,250,000 920,000 Net income and comprehensive income $ 350,000 $ 180,000 Statements of Changes in Equity Retained Earnings Section Year Ended December 31, 2020 Black White Retained earnings $ 100,000 $ 210,000 Net income 350,000 180,000 Dividends declared - 150,000 - 100,000 Retained earnings $ 300,000 $ 290,000 Instructions: Enter all numbers without dollar signs. Round numbers to the nearest whole dollar do not enter any decimals in your number. Enter all numbers as positive numbers. Use commas properly. If the amount is zero, enter 0, do not leave any answers blank. For example, a properly formatted number is 125,250. Numbers incorrectly formatted with not result in any marks. Part A Consider how the SCI and SFP for Black would differ from the statements provided if Black reported its investment in White on the equity basis. Determine the following: Sales Dividend income Cost of sales Depreciation expense Income tax expense Other expenses Equity in White's earnings Retained earnings, December 31, 2019 Dividends Retained earnings, December 31, 2020 Cash Accounts and other receivable Inventories Building and equipment Accumulated depreciation Investment in White Other investments Accounts and other payables Deferred income taxes Common shares