Pelicans Corp. acquired all 100% of Suns Company outstanding shares for $128,000 in cash on 1/1/2021.

On January 1, 2021, Suns had the following assets and liabilities with estimated fair values in excess of their respective book values:

Book Value Fair Value

Inventory (sold in 2021) $ 16,000 $20,000

PP&Equip. (5-year life) 120,000 130,000

Patent (4-year life) -0- 12,000

Note Payable (matures 12/31/22) 50,000 56,000

On 12/31/21, Pelicans management determined that the goodwill from acquisition of Suns was impaired by $1,500.

REQUIRED:

1. Prepare the journal entry that Pelicans makes for the acquisition.
2. Prepare the AAP schedule for this acquisition and determine the amortization of AAP for 2021 & 2022.
3. Complete the two worksheets that follow.
4. Prepare a consolidated income statement and balance sheet for fiscal year-end 2022, in good form.