Paper Corp. purchased $70\%$ of the outstanding shares of Sand Ltd$.$ on January $1,$ Year $2,$ at a cost of $$92,855.$ Paper has always used the equity method to account for its investments. On January $1,$ Year $2,$ Sand had common shares of $$50,000$ and retained earnings of $$31,250,$ and fair values were equal to carrying amounts for all its net assets, except inventory $($fair value was $$5,600$ less than carrying amount$)$ and equipment $($fair value was $$18,000$ greater than carrying amount$).$ The equipment, which is used for research, had an estimated remaining life of six years on January $1,$ Year $2.$

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The following are the financial statements of Paper Corp. and its subsidiary Sand Ltd$.$ as at December $31,$ Year $5$:

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BALANCE SHEETSAt December $31,$ Year $5$Paper$$SandCash$$$$$24,000$Accounts receivable$46,00034,100$Note receivable$33,900$Inventory$88,20051,000$Equipment $($net$)310,00083,000$Land$197,00044,000$Investment in Sand$138,992$$$780,192$$$270,000$Bank indebtedness$$188,205$$$$Accounts payable$78,00065,000$Notes payable$33,900$Common shares$150,00050,000$Retained earnings$330,087155,000$$$780,192$$$270,000$

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INCOME STATEMENTSFor the year ended December $31,$ Year $5$Paper$$SandSales$$854,000$$$401,700$Management fee revenue$27,600$Equity method income from Sand$1,956$Interest income$3,390$Gain on sale of land$10,900883,556415,990$Cost of sales$512,400267,800$Research and development expenses$47,00017,600$Interest expense$21,200$Miscellaneous expenses$120,00035,200$Income taxes$73,10038,156773,700358,756$Net income$$109,856$$$57,234$

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Additional Information

During Year $5,$ Sand made a cash payment of $$2,300$ per month to Paper for management fees, which is included in Sand$$s Miscellaneous expenses.

During Year $5,$ Paper made intercompany sales of $$120,000$ to Sand. The December $31,$ Year $5,$ inventory of Sand contained goods purchased from Paper amounting to $$36,000.$ These sales had a gross profit of $35\%.$

On April $1,$ Year $5,$ Paper acquired land from Sand for $$33,900.$ This land had been recorded on Sand$$s books at a carrying amount of $$23,000.$ Paper paid for the land by signing a $$33,900$ note payable to Sand, bearing yearly interest at $10\%.$ Interest for Year $5$ was paid by Paper in cash on December $31,$ Year $5.$ This land was still being held by Paper on December $31,$ Year $5.$

The value of consolidated goodwill remained unchanged from January $1,$ Year $2,$ to July Year $5.$ On July $1,$ Year $5,$ a valuation was performed, indicating that the recoverable amount of consolidated goodwill was $$4,900.$

During the year ended December $31,$ Year $5,$ Paper paid dividends of $$80,000$ and Sand paid dividends of $$20,000.$

Sand and Paper pay taxes at a $40\%$ rate. Assume that none of the gains or losses were capital gains or losses.

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Required:

$($a$)$ Prepare, in good form, a calculation of goodwill and any undepleted acquisition differential as of December $31,$ Year $5.($Negative amounts should be indicated by a minus sign. Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Omit $ sign in your response.$)$

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$$Balance$$Changes to$$Balance$$January $1,$ Year $2$Year $2-4$Year $5$Dec$.31,$ Year $5$Inventory$$$ $$$ $$$ $$$ Equipment$$Goodwill$$$ $$$ $$$ $$$

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$($b$)$ Prepare Paper$$s consolidated income statement for the year ended December $31,$ Year $5,$ with expenses classified by function. $($Round your answer to nearest whole dollar.$)$

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$($c$)$ Calculate the following balances that would appear on Paper$$s consolidated balance sheet as at December $31,$ Year $5$: $($Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Omit $ sign in your response.$)$

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$($i$)$ Inventory$$ $

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$($ii$)$ Land$$ $

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$($iii$)$ Notes payable$$ $

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$($iv$)$ Non$-$controlling interest$$ $

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$($v$)$ Common shares$$ $

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$($d$)$ Assume that an independent business valuator valued the non$-$controlling interest at $$38,200$ at the date of acquisition. Calculate goodwill impairment loss and profit attributable to non$-$controlling interest for the year ended December $31,$ Year $5.($Omit $ sign in your response.$)$

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$$Goodwill impairment loss$$$ Profit attributable to non$-$controlling interest$$$