Paper Corp. purchased $70\%$ of the outstanding shares of Sand Ltd$.$ on January $1,$ Year $2,$ at a cost of $$77,910.$ Paper has always used the equity method to account for its investments. On January $1,$ Year $2,$ Sand had common shares of $$50,000$ and retained earnings of $$23,000,$ and fair values were equal to carrying amounts for all its net assets, except inventory $($fair value was $$3,600$ less than carrying amount$)$ and equipment $($fair value was $$10,800$ 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 $ $$ $ $14,000$

Accounts receivable $38,00027,100$

Note receivable $30,700$

Inventory $72,00046,000$

Equipment $($net$)240,00078,000$

Land $167,00034,000$

Investment in Sand $119,721$

$ $636,721$ $ $229,800$

Bank indebtedness $ $124,910$ $ $$

Accounts payable $58,00049,800$

Notes payable $30,700$

Common shares $150,00050,000$

Retained earnings $273,111130,000$

$ $636,721$ $ $229,800$

INCOME STATEMENTS

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

Paper Sand

Sales $ $814,000$ $ $310,800$

Management fee revenue $15,600$

Equity method income from Sand $4,950$

Interest income $3,070$

Gain on sale of land $17,700$

$834,550331,570$

Cost of sales $488,400207,200$

Research and development expenses $42,00013,600$

Interest expense $13,200$

Miscellaneous expenses $110,00023,200$

Income taxes $70,90035,028$

$724,500279,028$

Net income $ $110,050$ $ $52,542$

Additional Information

During Year $5,$ Sand made a cash payment of $$1,300$ per month to Paper for management fees, which is included in Sand$$s Miscellaneous expenses.

During Year $5,$ Paper made intercompany sales of $$65,000$ to Sand. The December $31,$ Year $5,$ inventory of Sand contained goods purchased from Paper amounting to $$19,500.$ These sales had a gross profit of $35\%.$

On April $1,$ Year $5,$ Paper acquired land from Sand for $$30,700.$ This land had been recorded on Sand$$s books at a carrying amount of $$13,000.$ Paper paid for the land by signing a $$30,700$ 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 $$3,900.$

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.

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 $

$-3600$

$

$3600$

$

$0$

$

$0$

Equipment

$10800$

Goodwill

$0$

$

$

$

$

$($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 $

$0$

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

$($v$)$ Common shares $

$150000$

$($d$)$ Assume that an independent business valuator valued the non$-$controlling interest at $$31,800$ 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 $