Paper Corp. purchased 70%% of the outstanding shares of Sand Lid. on January 1, Year 2, at a cost of $87,535. 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 $29.750. and fair values were equal to carrying amounts for all its net assets, except inventory (fair value was $5,200 less than carrying amount) and equipment (fair value was $17.400 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 $ 22,080 Accounts receivable 44, 090 32,780 Note receivable 31, 890 Inventory 84, 608 50, 090 Equipment (net) 292, 09e 82, 090 Land 191, 096 42, 980 Investment in Sand 135, 884 $747, 484 $260, 589 Bank indebtedness $172, 145 Accounts payable 74, 090 60, 580 Notes payable 31, 80e Common shares 150, 090 50,980 Retained earnings 319,539 150, 980 $747, 484 $260, 509 INCOME STATEMENTS For the year ended December 31, Year 5 Paper Sand Sales $ 846, 808 $ 365,708 Management fee revenue 25, 280 Equity method income from Sand 2,862 Interest income 3,186 Gain on sale of land 19,209 874, 862 379,680 Cost of sales 587, 609 243, 808 Research and development expenses 46, 809 16, 890 Interest expense 19, 609 Miscellaneous expenses 118, 809 32,890 Income taxes 72, 660 34, 512 763, 860 327,912 Net income 110, 202 51, 768 Additional Information During Year 5. Sand made a cash payment of $2100 per month to Paper for management fees, which is included in Sand's Miscellaneous expenses. During Year 5. Paper made intercompany sales of $110.000 to Sand. The December 31. Year 5. inventory of Sand contained goods purchased from Paper amounting to $33.000. These sales had a gross profit of 35%. On April 1. Year 5. Paper acquired land from Sand for $31,800. This land had been recorded on Sand's books at a carrying amount of $21,000. Paper paid for the land by signing a $31,800 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 $4,700. 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 "esponse.)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.) PAPER CORP. Consolidated Income Statement For the Year Ended December 31, Year 5 Total revenue Total expenses S Attributable to: Shareholders of Paper Non-controlling interest S 0(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 "O" wherever required. Omit $ sign In your response.) (I) Inventory Inventory (ll) Land Land S (Ill) Notes payable Notes payable $ (lv) Non-controlling interest Non-controlling interest (v) Common shares Common shares (d) Assume that an independent business valuator valued the non-controlling interest at $36.350 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