Palmer, a U.S. company, acquired 70% of Scalas voting stock for $25,355 in cash on January 1, 2019, when Scalas book value was $5,000. The fair value of the NCI at the date of acquisition was $4,755. At the date of acquisition, all of Scalas assets and liabilities were reported at fair value, except for the following items:

Plant assets book value $20,000 and fair value $8000 the remaining life 12 years

identifiable intangible leaseholds book value o, fair value 20,000 and remaining life is 5 yr

All depreciation and amortization are straight-line. There is no impairment of plant & equipment or identifiable intangibles in 2019, 2020 or 2021. In July 2019 Scala sold a machine to Palmer for $100,000. At the time of the sale the machine had a book value of $50,000. It was estimated that the machine had a remaining useful life of 5 years at the time of the transfer to Palmer. Palmer sold the machine to an independent 3^rd party in October 2020.

Total impairment of goodwill arising from this acquisition for the years 2019 and 2020 is $3,000. Goodwill impairment for 2021 is $1,000.

Scala sells inventory to Palmer at a markup of 20% on cost. Here is information on inventory transactions for 2021.

	Balance
Inventory on Palmers books, acquired from Scala, as of January 1, 2021	$ 2,880
Inventory on Palmers books, acquired from Scala, as of December 31, 2021	3,600
Total sales from Scala to Palmer, at price charged to Palmer, for 2021	25,000
Amount Palmer still owes Scala for 2021 purchases of inventory	5,000

You are preparing the consolidated financial statements for 2021 (third year since acquisition). Palmer uses the complete equity method to report its investment on its own books.

Fill in the working paper to consolidate the December 31, 2021 Palmer and Scala. Clearly label eliminating entries (C), (I), (E), (R), (O), and (N).

Online Class FA 22	Palmer	Scala		Dr	Cr		Consol.
Current assets (Cash, Inv, AR)	$ 26,000	$ 7,000
Plant assets, net	$ 140,000	$ 89,200
ID intangibles
Investment in Scala	$ 21,485
Goodwill
Total Assets	$ 187,485	$ 96,200
Total liabilities	$ 140,434	$ 81,700
Capital stock	$ 5,000	$ 2,000	e	$ 2,000
Retained earnings, beg	$ 25,000	$ 8,000	e	$ 8,000
Dividends		$ (800)			$ 800	e
AOCI (L), beg.	$ 850	$ (500)
NCI in equity
Current Year Earnings	$ 16,066	$ 6,000					$ 16,066
Current Year OCI(L)	$ 135	$ (200)					$ 135
Total Liab & Equity	$ 187,485	$ 96,200					$ 16,201
Sales revenue	$ 150,000	$ 50,000
Equity in NI of Scala	$ 1,066	$ -
Cost of goods sold	$ 120,000	$ 30,000
Operating expenses	$ 15,000	$ 14,000
Goodwill impairment
NCI in NI	$ -	$ -
Net Income	$ 16,066	$ 6,000
OCI(L)	$ 275	$ (200)
Equity in OCL of Scala	$ (140)	$ -
NCI in OCI(L)	$ -	$ -
Net OCI(L)	$ 135	$ (200)
Total Comprehensive Income	$ 16,201	$ 5,800