PART C: 1- Porto Incorporated purchased 80% of The Sentiago Company on January 2, 2014, when Sentiago's book value was $800,000. Porto paid $700,000 for their acquisition, and the fair value of noncontrolling interest was $175,000. At the date of acquisition, the fair value and book value of Sentiago's identifiable assets and liabilities were equal. At the end of the year, the separate companies reported the following balances:

PortoSentiago Current assets $5,700,000$1,250,000 Plant & equipment15,200,0003,400,000 Investment in Sentiago 780,0000 Goodwill00 Current liabilities 3,600,000 950,000 Long-term debt11,680,0002,800,000 Stockholders' Equity6,400,000900,000

Requirement 1: Calculate consolidated balances for each of the accounts as of December 31, 2014.

Requirement 2: Assuming that Sentiago has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary? (10 Marks)

2- Powell Corporation acquired 90% of the voting stock of Santer Corporation on January 1, 2021 for $11,700 when Santer had Capital Stock of $5,000 and Retained Earnings of $4,000. The amounts reported on the financial statements approximated fair value, with the exception of inventories, which were understated on the books by $500 and were sold in 2021, land which was undervalued by $1,000, and equipment with a remaining useful life of 5 years under the straight-line method which was undervalued by $1,500. Any remainder was assigned to goodwill.

Financial statements for Powell and Santer Corporations at the end of the fiscal year ended December 31, 2022 appear in the first two columns of the partially completed consolidation working papers. Powell has accounted for its investment in Santer using the equity method of accounting. Powell Corporation owed Santer Corporation $100 on open account at the end of the year. Dividends receivable in the amount of $450 payable from Santer to Powell is included in Powell's net receivables.

Required: Prepare the elimination entries required for consolidation on December 31, 2022. Show all required computations & Complete the consolidation working papers for Powell Corporation and Subsidiary for the year ended December 31, 2022. (10 Marks)

PowellSanterEliminationsConsolidated

DebitCredit

INCOME STATEMENT Sales 10,000 6,500 Income from Santer1,080 Cost of Sales( 4,000)( 3,300) Depreciation Expense( 1,000)( 1,000) Other expenses( 1,800)( 700) Noncontrolling Interest Share Net income4,2801,500 Retained Earnings 1/12,5105,000 Add: Net income4,2801,500 Less: Dividends( 2,000)( 1,000) Retained Earnings 12/314,7 90$ 5,500 BALANCE SHEET Cash1,4401,900 Receivables-net1,100600 Inventories1,5001,200 Land1,0001,600 Equipment and Buildings-net7,5006,700 Investment in Santer 12,060 Goodwill TOTAL ASSETS24,60012,000 LIAB. EQUITY Accounts Payable 3, 810 1,000 Dividends Payable2,000500 Capital Stock14,0005,000 Ret. Earnings4,7905,500 Nonctl. Interest 1/1 Nonctl. Interest 12/31 LIAB. & EQUITY24,60012,000