P4.4 Consolidated Financial Statements One Year After Acquisition Ponon Corporation acquired all of the stock of Santo Corporation on January 2, 2023, for $25,000,000 cash and debt. The book value of Santo's shareholders' equity was $10,000,000 and the resulting $15,000,000 excess of acquisition cost over book value was allocated as follows: (1) Santo uses the FIFO method of inventory valuation, and its beginning inventory was sold during 2023. (2) Goodwill is impaired by $400,000 during 2023. The following are the financial statements of Ponon and Santo at December 31, 2023. Neither company declared dividends in 2023. Ponon uses the complete equity method to report its investment in Santo on its own books. Required a. Prepare a schedule to compute the 2023 equity in net income of Santo. b. Use a working paper to consolidate the trial balances of Ponon and Santo at December 31, 2023. c. Prepare the December 31, 2023, consolidated balance sheet and 2023 consolidated statement of comprehensive income. a. Prepare a scheoule to compure tine 2025 equity in ner income or santo. Santo's reported net income Revaluation write-offs. Inventory Plant assets Patents Long-term debt Goodwill impairment loss Equity in net income of Santo b. Use a working paper to consolidate the trial balances of Ponon and Santo at December 31, 2023. Cash and receivables Inventory Plant assets, net Investment in Santo Patents Goodwill Current liabilities Long-term debt Capital stock Retained earnings, Jan. 1 AOCl, Jan. 1 Sales Equity in income of Santos Equity in OCl of Santos Cost of goods sold Depreciation and amortization expense Interest and other expenses GW impairment loss Other comprehensive income Trial Balances Taken From Books c. Prepare the December 31,2023, consolidated balance sheet and 2023 consolidated statement of comprehensive income. Consolidated Statement of Comprehensive Income December 31, 2023 Sales Cost of goods sold Gross margin Operating Expenses: Depreciation and amortization expense Interest and other expenses Goodwill impairment loss Net income Other comprehensive income Comprehensive income Consolidated Balance Sheet December 31, 2023 Assets Cash and receivables Inventory Plant assets, net Patents Goodwill Total assets Liabilities and stockholders' equity Current liabilities Long-term debt Capital stock Retained earnings Accumulated other comprehensive income Total liabilities and stockholders' equity