Pep Corporation acquired 70 percent of See Company stock on January 1, 2019 for $570,500 cash. The fair market value of the 30 percent noncontrolling interest on this date was $244,500. Following are trial balances of Pep Corporation and See Company as of December 31, 2019: PEP CORPORATION SEE COMPANY Debit Credit Debit Credit Cash 749,500 230,500 Accounts Receivable 294,000 204,000 Inventory 473,000 195,000 Investment in See Corp. 725,340 Buildings 625,000 360,000 Land 790,000 225,000 Equipment 481,000 233,000 Cost of Goods Sold 382,000 110,100 Depreciation Expense, Building 62,500 18,600 Depreciation Expense, Equipment 96,200 23,100 Selling & Administrative Expense 273,000 128,300 Dividends Declared 60,000 50,000 Accumulated Depreciation, Bidg 250,000 130,200 Accumulated Depreciation, Equip 288,600 138,600 Accounts Payable 118,000 165,800 Bonds Payable 500,000 120,000 Common Stock ($1 par) 600,000 274,000 Additional Paid In Capital 1,528,200 157,000 Retained Earnings (01/01/2019) 809,000 219,000 Sales 727,900 573,000 Income from See Corp. 189,840 $ 5,011,540 $ 5,011,540 S 1,777,600 $ 1,777,600 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 $3,000 (all of this inventory was sold during 2019). Building - was undervalued by $48,000 (remaining useful life was estimated to be 5 years) . Land - was by undervalued $53,000 Equipment - was overvalued by $17,000 (remaining useful life was estimated to be 10 years). The new Goodwill from the acquisition was impaired by $16,800 at year-end. 2. Pep Corporation uses the (full) 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 as of the acquisition date. Determine the total "differential" and then break this amount out into the excess cost detail and (new) goodwill components. PLEASE BE SURE TO CLEARLY LABEL YOUR DETAIL. (4 POINTS) Fair Value of Consideration given from Pep Company to See's Shareholders: PLUS: Fair Value of Any Noncontrolling Interest EQUALS: Total Fair Value MINUS: Book Value of See Company's Net Identifiable Assets S EQUALS: Differential MINUS: Identifiable Excess EQUALS: New Goodwill b. Recreate the 4 JOURNAL ENTRIES recorded by Pep with regard to its investment in See Company at January 1, 2019 and during 2019. PLEASE BE SURE TO SHOW YOUR WORK FOR YOUR JOURNAL ENTRY AMOUNTS. (7 POINTS) c. Using your information from b. above, calculate the 12/31/19 balances for Pep Company's Investment in See and Income from See accounts. Use the T accounts provided below. (2 POINTS) Pep Company's General Ledger Investment in See Income from Seed. Prepare the 3 REQUIRED CONSOLIDATION WORKSHEET ENTRIES (BCE, AEVRE, & EVRE) at December 31, 2019. IN ORDER TO RECEIVE FULL CREDIT FOR YOUR ANSWERS PLEASE BE SURE TO SHOW YOUR WORK RELATED TO THE DOLLAR AMOUNTS FOR NCINI, NCINA, INCOME FROM SEE AND INVESTMENT IN SEE. (15 POINTS) BASIC CONSOLIDATION ENTRY (6 POINTS): AMORTIZATION OF EXCESS VALUE RECLASSIFICATION ENTRY (4 POINTS): (REMAINING) EXCESS VALUE RECLASSIFICATION ENTRY (5 POINTS):e. Prepare the consolidation worksheet for the period ended December 31, 2019. You may use the template provided below OR the template on the next page. (12 POINTS) PEP CORPORATION Consolidation Worksheet For the Period Ending December 31, 2019 PEP'S SEE'S CONSOLIDATION ENTRIES Consolidated Accounts G/L Debit Credit Totals Income Statement Sales 727,900 573,000 Cost of Goods Sold (382,0001 (110,100) Depreciation Expense, Building (62.500) $ (18,600) Depreciation Expense, Equipment (95.2001 5 (23,100) Selling & Administrative Expense (273,000) 5 (128,300) Goodwill Impairment Loss Income from Sec Corp 189,840 Consolidated Net Income 104,040 192,900 INCl in Net Income Controlling Interest in Net Income 104,040 292,900 Statement of Retained Earnings Retained Eamings (01/01/2019) 809,000 $ 219,000 Net Income [above) 104,040 292,900 Dividends Declared 60,0001 (50,000) Retained earnings, 12/31/19 853,040 461,900 Balance Sheet Cash 749.500 230,500 Accounts Receivable 294,000 204,000 Inventory 473,000 195,000 Investment in See Corp. 725,340 Buildings 625,000 360,000 Land 790,000 225,000 Equipment 481,000 OOO'EE Accumulated Depreciation, Bids (250,0001 (130,200) Accumulated Depreciation, Equip (288,600) $ (138,600) Goodwill (NEW] Total Assets 3,599,240 1,178,700 Accounts Payable 118/000 165,800 Bonds Payable 500.000 120,000 Common Stock ($1 par) 600,000 274,000 Additional Paid In Capital 1,528,200 157,DOO Retained comings, 12/31/19 (above) 853,040 5 461,900 NC In Net Assets Total Liabilities & Stockholders' Equity 5 3,599,240 1,178,700 NET ASSETS (CONTROLLING INTEREST] ASSETS - LIABILITIES ASSETS - LIABILITIES . NOINA TOTAL STOCKHOLDERS EQUITY TOTAL STOCKHOLDERS' EQUITY (CONTROLLING INTEREST)