Paramount Corporation acquired its $75$ percent investment in Sun Corporation on January $1,2018,$ for $$3,142,500,$ and accounts for its investment internally using the complete equity method. At the acquisition date, Sun's book value consisted of $$1,000,000$ in capital stock and $$500,000$ in retained earnings, and the estimated fair value of the $25$ percent noncontrolling interest was $$607,500.$ The fair values of Sun$$s assets and liabilities were equal to their carrying values, except for the following items:

Fair value less Book value

Accounts receivable $$(100,000)$

Inventory $(100,000)$

Equipment $(10$ years, straight$-$line$)(200,000)$

Patents $(5$ years, straight$-$line$)430,000$

Deferred tax liabilities $($created as a result of the nontaxable acquisition$)80,000$

The inventory was sold during the first three years following the acquisition. Deferred tax liabilities of $$40,000$ were reversed during $20182023.$ An impairment test made at the end of $2023$ indicates a remaining value of $$2,000,000$ for the goodwill recognized as a result of the acquisition. Sun$$s shareholders$$ equity is $$3,200,000,$ including $$2,200,000$ of retained earnings, at the end of $2023.$

For all answers below: Enter answers using all zeros, do not abbreviate to thousands or millions.

Required

$($a$)$ Calculate the amount of goodwill initially recognized as a result of the acquisition, and its allocation to the controlling and noncontrolling interests.

Allocation of goodwill

Goodwill Answer

Paramount$$s share of goodwill: Answer

$0$

Noncontrolling interest$$s share of goodwill Answer

$0$

$($b$)$ Calculate the balance in the investment account, carried on Paramount$$s books, and the value of the noncontrolling interest, reported in the equity section of the consolidated balance sheet, as of the end of $2023.$

Balances as of $2023$ year$-$end

Investment in Sun Answer

$0$

Noncontrolling interest in Sun Answer

$0$

$($c$)$ Assume eliminating entry $($C$),$ to reverse Paramount$$s equity method entries for $2024,$ has been made. Prepare $2024$ eliminating entries $($E$)$ and $($R$)$ to adjust Sun$$s assets to the correct values as of the beginning of $2024,$ eliminate the remainder of the investment, and recognize the beginning$-$of$-2024$ value of the noncontrolling interest.

Consolidation Journal

Description Debit Credit

$($E$)$

Answer

Shareholders' equity$-$Sun

Answer

$0$

Answer

$0$

Answer

Investment in Sun

Answer

$0$

Answer

$0$

Noncontrolling interest in Sun Answer

$0$

Answer

$0$

$($R$)$

Answer

Investment in Sun

Answer

Answer

$0$

Equipment, net Answer

$0$

Answer

$0$

Deferred tax liabilities Answer

$0$

Answer

$0$

Answer

Goodwill

Answer

$0$

Answer

Noncontrolling interest in Sun Answer

$0$

Answer

$0$