Padre, Inc. buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $802,720 cash. At the acquisition date, Sierra's total fair value, includint the noncontrolling interest was assessed at $1,003,400 although Sierra's book value was only $690,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: Land Building and equipment (10-year remaining | Copyright (20-year remaining life) Notes payable (due in 8 years) Book Value Fair Value $65,000 $287,000 $263,000 $290,000 $122,000 $216,000 ($176,000) ($157,600) For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies. Income Statement Revenues Padre, Inc. Sierra Corp ($1,394,980) ($684,900) Cost of Goods Sold 774,000 432,000 Depreciation expense 274,000 11,600 Amortization expense 0 6,100 Interest Expense 52,100 9,200 Equity in income of Sierra (177,120) 0 0 Net Income ($472,000) ($226,000) Statement of Retained Earnings Retained earnings 11 ($1,275,000) ($530,000) Net Income (Above) (472,000) (226,000) Dividends declared 260,000 65,000 Retained earnings 12/31 ($1,487,000) ($691,000) Balance Sheet Current assets $856,160 $764,700 Investment in Sierra $927,840 $0 Land $360,000 $65,000 Building & Equipment (Net) $909,000 $275,400 Copyright 0 Total Assets $3,053,000 115,900 $1,221,000 Accounts Payable Notes Payable ($275,000) ($194,000) ($541,000) ($176,000) Common Stock ($300,000) ($100,000) Additional Paid-in Capital ($450,000) ($60,000) Retained Earnings ($1,487,000) Total Liabilities & Equity ($3,053,000) ($691,000) ($1,221,000) At year-end, there were no intra-entity receivables or payables. Required: 1. (10pts) Determine the Excess of Fair value over Book value and allocate it to the 4 mentioned items. 2. (3 pts) Determine the amortization of the excess fair value over book value. 3. (8 pts) Determine the Equity in Sierra's earnings and allocate it to the controlling and non-controlling interest. 4. (24 pts) Complete the consolidation worksheet. (Total Assets = $3,638,860 and NCI = ($231,960)