Pecos Company acquired 100 percent of Suaro's outstanding stock for $1,450,000 cash on January 1, 2014, when Suaro had the following balance sheet:

Assets		Liabilities and Equity
Cash.....	$ 37,000	Liabilities.....	$(422,000)
Receivables.....	82,000
Inventory.....	149,000	Common stock.....	(350,000)
Land.....	90,000	Retained earnings.....	(126,000)
Equipment (net).....	225,000
Software.....	315,000
Total assets.....	$898,000	Total liabilities and equity.....	$(898,000)

At the acquisition date, the fair values of each identifiable asset and liability that differed from book value were as follows:

Land $80,000

Brand Name 60,000 (Indefinite life-unrecognized on Suaro's books)

Software 415,000 (2-year estimated remaining useful life)

In-Process R&D 300,000

Additional Information

Although at acquisition date Pecos expected future benefits from Suaro's in-process research and development (R&D), by the end of 2014, it became clear that the research project was a failure with no future economic benefits.

During 2014, Suaro earns $75,000 and pays no dividends.

Selected amounts from Pecos and Suaro's separate financial statements at December 31, 2015, are presented in the consolidated information worksheet. All consolidated worksheets are to be prepared as of December 31, 2015, two years subsequent to acquisition.

Pecos's January 1, 2015, Retained Earnings balancebefore any effect from Suaro's 2014 incomeis $(930,000) (credit balance).

Pecos has 500,000 common shares outstanding for EPS calculations and reported $2,943,100 for consolidated assets at the beginning of the period.

Following is the consolidated information worksheet.

A		B	C	D
	December 31, 2015, trial balances
		Pecos	Suaro
	Revenues	($1,052,000)	($427,000)
	Operating expenses	$821,000	$262,000
	Goodwill impairment loss	?
	Income of Suaro	?
	Net income	?	($165,000)
	Retained earningsPecos 1/1/15	?
	Retained earningsSuaro 1/1/15		($201,000)
	Net income (above)	?	($165,000)
	Dividends declared	$200,000	$35,000
	Retained earnings 12/31/15	?	($331,000)
	Cash	$195,000	$95,000
	Receivables	$247,000	$143,000
	Inventory	$415,000	$197,000
	Investment in Suaro	?
	Land	$341,000	$85,000
	Equipment (net)	$240,100	$100,000
	Software		$312,000
	Other intangibles	$145,000
	Goodwill
	Total assets	?	$932,000
	Liabilities	($1,537,100)	($251,000)
	Common stock	($500,000)	($350,000)
	Retained earnings (above)	?	($331,000)
	Total liabilities and equity	?	($932,000)
	Fair-value allocation schedule
	Price paid	$1,450,000
	Book value	$476,000
	Excess initial value	$974,000	Amortizations
	to land	($10,000)	2014	2015
	to brand name	$60,000	?	?
	to software	$100,000	?	?
	to IPR&D	$300,000	?	?
	to goodwill	$524,000	?	?
	Suaro's RE changes	Income	Dividends
	2014	$75,000	$0
	2015	$165,000	$35,000

2. Using separate worksheets, prepare Pecos's trial balances for each of the indicated accounting methods (equity, initial value, and partial equity). Use only formulas for the Investment in Suaro, the Income of Suaro, and Retained Earnings accounts.

I have figured out some of it (such as the fair-value allocation schedule that is the first part of this problem), but I truly want to learn how to do this especially with the formulas required. If you could provide explanations in addition to the answers, I would appreciate it!

Thank you for any help!