Pep Corporation acquired 100 percent of See Company stock on January 1, 2019 for $952,000 cash. Following are trial balances of Pep Corporation and See Company as of December 31, 2019: Credit SEE COMPANY Debit 320,500 204,000 175,000 Cash Accounts Receivable Inventory Investment in See Corp. Buildings Land Equipment Cost of Goods Sold Depreciation Expense, Building Depreciation Expense, Equipment Selling & Administrative Expense Dividends Declared Accumulated Depreciation, Bldg Accumulated Depreciation, Equip Accounts Payable Bonds Payable Common Stock (Si par) Additional Paid in Capital Retained Earnings (01/01/2019) 400 PEP CORPORATION Debit Credit 364,000 294,000 473,000 1,151,500 625,000 790,000 481,000 382,000 37,000 48.000 273,000 70,000 222,000 192,000 118.000 500,000 600,000 1,416,000 774,000 927,000 239,500 4,988,500 $ 4,988,500 360,000 225,000 233,000 110,100 16,800 32,100 117,600 40,000 100,800 160,500 165,800 120,000 284,000 175.000 291,000 537,000 Income from See Corp. $ $ 1,834,100 $ 1,834,100 Additional Information: 1. On January 1, 2019 the fair market value of See's assets equaled their book value with the exception of: Inventory-was overvalued by $6.000 (all of this inventory was sold during 2019). Building was overvalued by $20.000 (remaining useful life was estimated to be 8 years). Land-was by undervalued $81,000 Equipment-was undervalued by $74,000 remaining useful life was estimated to be 5 years). The new Goodwill from the acquisition was impaired by $14,600 at year-end. 2. Pep Corporation uses the fully equity method to account for its Investment in See Company. 3. The general ledger numbers given above (HINT: those in boldface) include the effects of the JOURNAL ENTRIES that were recorded by Pep at the acquisition date and during 2019 to account for its investment in See Company. These boldface figures should be used a check figures in your solution. Required: CLEARLY SHOW ALL OF YOUR WORK. a. Analyze the Investment In See account o f the ocquisition date. Determine the total differential and then break this amount out into the excess cost detail and newlgoodw.components. CLEARLY LABEL YOUR DETAIL. (10 POINTS) Fair Value of Consideration given from Pep Company to See's Shareholders: Fair Value of Any Noncontrolling interest $ 953,000 $ 0 Total Fair Value Book Value of See Company's Net Identifiable Assets 932,000 750,000 2.09,000 Differential of any Identifiable Excess (if any Overdued centou Buendeed building Land underoluedd Equipment direc Coco 20,000 81,000 th000 181,000 New Goodwill fanyl 9 Coss a b. Recreate the 4 JOURNAL ENTRIES recorded by Pep with regard to its investment in See Company at January 1, 2019 and during 2019. BE SURE TO SHOW YOUR WORK FOR THE NUMBERS INCLUDED IN THE AMORTIZATION OF EXCESS VALUE JOURNAL ENTRY. (10 POINTS) 6000 119 or investment insee Co stock 952,000 Pipap burch, 900 Cash 952,000 perapeau lowestment in See oorp. 960,900 income from Seecoup 260.700 40,000 med in see MO,000 cosh/Divident Recureable Using your information from b. above, cakulate the 12/31/19 balances for Pep Company's Investment in See and Income from See accounts. Use the accounts provided below. (4 POINTS) Pep Company's General Ledger Investment in See income from See d. Prepare the 3 REQUIRED CONSOLIDATION WORKSHEET ENTRIES BCE. AEVRE. BLIVRE) December 31, 2012. (28 POINTS) Pep Corporation acquired 100 percent of See Company stock on January 1, 2019 for $952,000 cash. Following are trial balances of Pep Corporation and See Company as of December 31, 2019: Credit SEE COMPANY Debit 320,500 204,000 175,000 Cash Accounts Receivable Inventory Investment in See Corp. Buildings Land Equipment Cost of Goods Sold Depreciation Expense, Building Depreciation Expense, Equipment Selling & Administrative Expense Dividends Declared Accumulated Depreciation, Bldg Accumulated Depreciation, Equip Accounts Payable Bonds Payable Common Stock (Si par) Additional Paid in Capital Retained Earnings (01/01/2019) 400 PEP CORPORATION Debit Credit 364,000 294,000 473,000 1,151,500 625,000 790,000 481,000 382,000 37,000 48.000 273,000 70,000 222,000 192,000 118.000 500,000 600,000 1,416,000 774,000 927,000 239,500 4,988,500 $ 4,988,500 360,000 225,000 233,000 110,100 16,800 32,100 117,600 40,000 100,800 160,500 165,800 120,000 284,000 175.000 291,000 537,000 Income from See Corp. $ $ 1,834,100 $ 1,834,100 Additional Information: 1. On January 1, 2019 the fair market value of See's assets equaled their book value with the exception of: Inventory-was overvalued by $6.000 (all of this inventory was sold during 2019). Building was overvalued by $20.000 (remaining useful life was estimated to be 8 years). Land-was by undervalued $81,000 Equipment-was undervalued by $74,000 remaining useful life was estimated to be 5 years). The new Goodwill from the acquisition was impaired by $14,600 at year-end. 2. Pep Corporation uses the fully equity method to account for its Investment in See Company. 3. The general ledger numbers given above (HINT: those in boldface) include the effects of the JOURNAL ENTRIES that were recorded by Pep at the acquisition date and during 2019 to account for its investment in See Company. These boldface figures should be used a check figures in your solution. Required: CLEARLY SHOW ALL OF YOUR WORK. a. Analyze the Investment In See account o f the ocquisition date. Determine the total differential and then break this amount out into the excess cost detail and newlgoodw.components. CLEARLY LABEL YOUR DETAIL. (10 POINTS) Fair Value of Consideration given from Pep Company to See's Shareholders: Fair Value of Any Noncontrolling interest $ 953,000 $ 0 Total Fair Value Book Value of See Company's Net Identifiable Assets 932,000 750,000 2.09,000 Differential of any Identifiable Excess (if any Overdued centou Buendeed building Land underoluedd Equipment direc Coco 20,000 81,000 th000 181,000 New Goodwill fanyl 9 Coss a b. Recreate the 4 JOURNAL ENTRIES recorded by Pep with regard to its investment in See Company at January 1, 2019 and during 2019. BE SURE TO SHOW YOUR WORK FOR THE NUMBERS INCLUDED IN THE AMORTIZATION OF EXCESS VALUE JOURNAL ENTRY. (10 POINTS) 6000 119 or investment insee Co stock 952,000 Pipap burch, 900 Cash 952,000 perapeau lowestment in See oorp. 960,900 income from Seecoup 260.700 40,000 med in see MO,000 cosh/Divident Recureable Using your information from b. above, cakulate the 12/31/19 balances for Pep Company's Investment in See and Income from See accounts. Use the accounts provided below. (4 POINTS) Pep Company's General Ledger Investment in See income from See d. Prepare the 3 REQUIRED CONSOLIDATION WORKSHEET ENTRIES BCE. AEVRE. BLIVRE) December 31, 2012. (28 POINTS)