Paper Corp. purchased 70% of the outstanding shares of Sand Ltd. on January 1, Year 2, at a cost of $80,220. 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 $24,000, and fair values were equal to carrying amounts for all its net assets, except inventory (fair value was $3,800 less than carrying amount) and equipment (fair value was $11,400 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	$			$	15,000
Accounts receivable		38,500			27,800
Note receivable					35,800
Inventory		73,500			46,500
Equipment (net)		245,000			78,500
Land		170,000			35,000
Investment in Sand		119,644
	$	646,644		$	238,600
Bank indebtedness	$	124,105		$
Accounts payable		60,000			56,100
Notes payable		35,800
Common shares		150,000			50,000
Retained earnings		276,739			132,500
	$	646,644		$	238,600

INCOME STATEMENTS
For the year ended December 31, Year 5
	Paper		Sand
Sales	$	818,000		$	313,500
Management fee revenue		16,800
Equity method income from Sand		3,226
Interest income					3,580
Gain on sale of land					21,800
		838,026			338,880
Cost of sales		490,800			209,000
Research and development expenses		42,500			14,000
Interest expense		14,000
Miscellaneous expenses		111,000			24,400
Income taxes		71,120			36,592
		729,420			283,992
Net income	$	108,606		$	54,888

Additional Information

• During Year 5, Sand made a cash payment of $1,400 per month to Paper for management fees, which is included in Sands Miscellaneous expenses.
• During Year 5, Paper made intercompany sales of $70,000 to Sand. The December 31, Year 5, inventory of Sand contained goods purchased from Paper amounting to $21,000. These sales had a gross profit of 35%.
• On April 1, Year 5, Paper acquired land from Sand for $35,800. This land had been recorded on Sands books at a carrying amount of $14,000. Paper paid for the land by signing a $35,800 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 $4,000.
• 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 Papers 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 Papers 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 $32,250 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		$

please explain step by step and how do you get that answer . Thank you