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please look at what is incorrect and correct . On January 3, 2016. Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff,

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On January 3, 2016. Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc. in exchange for $6,163,000 in cash. Persoff elected to exercise control over Sea Cliff as a wholly owned subsidiary with an independent accounting system. Both companies have December 31 fiscal year-ends. At the acquisition date, Sea Cliff's stockholders' equity was $2,505,500 including retained earnings of $1,705,500. Persoff pursued the acquisition, in part, to utilize Sea Cliff's technology and computer software. These items had fair values that differed from their values on Sea Cliff's books as follows: Asset Patented technology Computer software Book Value $ 142,500 61,500 Fair Value $ 2,277, 500 1,381, 500 Remaining Useful Life 7 years 12 years Sea Cliff's remaining identifiable assets and liabilities had acquisition-date book values that closely approximated fair values. Since acquisition, no assets have been impaired. During the next three years, Sea Cliff reported the following income and dividends: Net Income GAA AA Dividends 15A. 2016 2016 2017 2018 Net Income $ 900,100 940,100 975, 100 Dividends $150,000 150,000 150, eee December 31, 2018, financial statements for each company appear below. Parentheses indicate credit balances. Dividends declared were paid in the same period. Persoff Sea Cliff Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Equity earnings in Sea Cliff Net Income Statement of Retained Earnings Retained earnings 1/1 Net Income (above) Dividends declared $ (2,730,000) 1,354,900 277,500 373, eee (560, 100) $ (1,284,700) $(2,255,000) 871,900 382,eee 26,000 (975, 100) (7,475,000) (1,284,700) 600,000 (3.245.700 (975. 10e 150,000 1 of 2 Next > UMOWU W LUNCLE UIMONELL IU we work you have completed so $ (7,475,000) (1,284,700) 600,000 $ (8,159,700) $ (3,245.700) (975, 100) 150,000 $(4,070,890) 377,500 Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 Balance Sheet Current assets Investment in Sea Cliff Computer software Patented technology Goodwill Equipment Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity 46,500 82,000 494,500 7,283,300 305,000 806,000 102,000 1,838,500 10,829,300 (669,600) (2,000, eee) (8, 159,700) $(10,829,300) 4,510,000 $ 5,016,000 $ (145,200) (800,000) (4,070, 800) $(5,016,000) Note: Parentheses indicate a credit balance. 1 of 2 Next > X Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Determine Persoff's Equity earnings in Sea Cliffla balance for the year ended December 31, 2018. Amortization expense Equity accrual 975, 100 % 415,000 Equity earnings in Sea Cliff 560.100 Determine Persoff's December 31, 2018, Investment in Sea Cliff's balance Fair value at 1/1/16 Dividends declared since acquisition Post-acquisition earnings net of amortization Sea Cliff dividends since acquisition 6,163,000 525,100 (150,000) X 330,000 7.283,300 Investment in Sea Cliff $ 377,500 872,000 150,000 0 % Ddidlice net Current assets Investment in Sea Cliff Computer software Patented technology Goodwill Equipment Total assets $ 494,500 7,283,300 305,000 806,000 102,000 1,838,500 $ 10,829,300 46,500 82,000 560,100 X 3,245,700 3,627,500 110,000 X 0 % 4,510,000 $ 5,016,000 1,341,500 2,108,000 $ 4,321,500 Liabilities Common stock Retained earnings 12/31 Total liabilities and equity (669,600) (2,000,000) (8,159,700) (145,200) (800,000) (4.070.800) 800,000 814,800 (2,000,000) (8.159 700) (9.344 900) (5,016,000) (10.829.300) $ 5.170,800 $ 7.693,300 s

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