Paper Corp. purchased $70\%$ of the outstanding shares of Sand Ltd$.$ on January $1,$ Year $2,$ at a cost of $$83,090.$ Paper has always used the equity method to account for its investments. On January $1,$ Year $2,$ Sand had common shares of $$50,000$ and retained earnings of $$25,800,$ and fair values were equal to carrying amounts for all its net assets, except inventory $($fair value was $$4,200$ less than carrying amount$)$ and equipment $($fair value was $$12,900$ greater than carrying amount$).$ The equipment, which is used for research, had an estimated remaining life of six years on January $1,$ Year $2.$

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

BALANCE SHEETS

At December $31,$ Year $5$

Paper Sand

Cash $ $$ $ $17,000$

Accounts receivable $39,50029,200$

Note receivable $39,700$

Inventory $76,50047,500$

Equipment $($net$)257,00079,500$

Land $176,00037,000$

Investment in Sand $122,206$

$ $671,206$ $ $249,900$

Bank indebtedness $ $130,760$ $ $$

Accounts payable $64,00062,400$

Notes payable $39,700$

Common shares $150,00050,000$

Retained earnings $286,746137,500$

$ $671,206$ $ $249,900$

INCOME STATEMENTS

For the year ended December $31,$ Year $5$

Paper Sand

Sales $ $826,000$ $ $321,600$

Management fee revenue $19,200$

Equity method income from Sand $1,674$

Interest income $3,970$

Gain on sale of land $23,700$

$846,874349,270$

Cost of sales $495,600214,400$

Research and development expenses $43,50014,800$

Interest expense $15,600$

Miscellaneous expenses $113,00026,800$

Income taxes $71,56037,308$

$739,260293,308$

Net income $ $107,614$ $ $55,962$

Additional Information

During Year $5,$ Sand made a cash payment of $$1,600$ per month to Paper for management fees, which is included in Sand$$s Miscellaneous expenses.

During Year $5,$ Paper made intercompany sales of $$80,000$ to Sand. The December $31,$ Year $5,$ inventory of Sand contained goods purchased from Paper amounting to $$24,000.$ These sales had a gross profit of $35\%.$

On April $1,$ Year $5,$ Paper acquired land from Sand for $$39,700.$ This land had been recorded on Sand$$s books at a carrying amount of $$16,000.$ Paper paid for the land by signing a $$39,700$ 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 $$4,200.$

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.

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.$)$

Balance Changes to Balance

January $1,$ Year $2$ Year $2-4$ Year $5$ Dec. $31,$ Year $5$

Inventory $

$

$

$

Equipment

Goodwill

$

$

$

$

$($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.$)$

$($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.$)$

$($i$)$ Inventory $

$($ii$)$ Land $

$($iii$)$ Notes payable $

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

$($v$)$ Common shares $

$($d$)$ Assume that an independent business valuator valued the non$-$controlling interest at $$33,150$ 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.$)$

Goodwill impairment loss $

Profit attributable to non$-$controlling interest $