Palmetto Company, a U.S. company, acquired 70% of Seaside Corporations stock for $25,500 in cash and stock on January 1, 2018, when Seasides book value was $6,000. The fair value of the noncontrolling interest at the date of acquisition was $9,500. At the date of acquisition, all of Seasides assets and liabilities were reported at amounts approximating fair value, except for the following previously unreported identifiable intangible assets, meeting GAAP requirements for capitalization:

All amortization is straight-line. Total impairment for technology for the years 2018 to 2020 is $1,000. There is no impairment in 2021. The leaseholds are amortized but are not impaired. Goodwill arising from this acquisition is tested annually for impairment. Total impairment for the years 2018 through 2020 is $2,400. Goodwill impairment for 2021 is $1,000. It is now December 31, 2021 (fourth year since acquisition). The trial balances of Palmetto and Seaside at December 31, 2021, collected from the books of Palmetto and Seaside, appear in consolidation working paper below. Palmetto uses the complete equity method to report its investment on its own books.

Required

a. Calculate the total goodwill originally recognized for this acquisition, and its allocation to the controlling interest and the noncontrolling interest.

b. Calculate 2021 equity in net income of Seaside, reported on Palmettos books, and noncontrolling interest in consolidated net income, reported on the 2021 consolidated income statement.

c. Prepare the consolidation eliminating entries (C), (E), (R), (O), and (N) at 12/31/2021.

d. Complete the working paper to consolidate the December 31, 2021 trial balances of Palmetto and Seaside.

e. Present, in good form, the consolidated income statement and consolidated statement of comprehensive income for 2021, and the consolidated balance sheet at December 31, 2021.

f. Present a schedule showing how the December 31, 2021 investment balance on Palmettos books, shown in its trial balance, was calculated.

Remaining Life at Fair Value Date of Acquisition Identifiable intangible: Technology $5,000 Indefinite life Identifiable intangible: Leaseholds 4,000 4 years Consol. Dr Cr Dr (Cr) Cash, receivables Inventory Plant & equipment (net) Identifiable intangible assets Investment in Seaside Palmetto Dr (Cr) $ 2,000 6,000 75,000 Seaside Dr (Cr) $ 500 1,500 21,300 26,660 -- (53,500) (2,000) (50,100) (1,200) (7,000) (1,400) (8,600) (1,000) (55,000) 400 Goodwill Total liabilities Capital stock Retained earnings, beginning AOCI, beginning Noncontrolling interest Revenues Other comprehensive loss (income) Equity in income of Seaside Equity in OCI of Seaside Cost of goods sold Operating expenses Noncontrolling interest in NI Noncontrolling interest in OCI Total (35,000) (300) (2,050) (210) 38,000 16,000 22,000 8,000 $ 0 Remaining Life at Fair Value Date of Acquisition Identifiable intangible: Technology $5,000 Indefinite life Identifiable intangible: Leaseholds 4,000 4 years Consol. Dr Cr Dr (Cr) Cash, receivables Inventory Plant & equipment (net) Identifiable intangible assets Investment in Seaside Palmetto Dr (Cr) $ 2,000 6,000 75,000 Seaside Dr (Cr) $ 500 1,500 21,300 26,660 -- (53,500) (2,000) (50,100) (1,200) (7,000) (1,400) (8,600) (1,000) (55,000) 400 Goodwill Total liabilities Capital stock Retained earnings, beginning AOCI, beginning Noncontrolling interest Revenues Other comprehensive loss (income) Equity in income of Seaside Equity in OCI of Seaside Cost of goods sold Operating expenses Noncontrolling interest in NI Noncontrolling interest in OCI Total (35,000) (300) (2,050) (210) 38,000 16,000 22,000 8,000 $ 0