Please see the attached and answer the problem WITH the proper elimination entries showing.

Paul Company acquired 100% of the outstanding common stock of Saul Company on June 30, 2014 for $473,000. On the acquisition date, Saul Company had retained earnings in the amount of $60,000; all other equity accounts have not changed since acquisition date. the fair value of its recorded assets and liabilities was equal to their book value. The excess of cost over the fair value of the recorded net assets was attributed to an unrecorded manufacturing formula held by Saul Company, which had an expected remaining useful life of five years from June 30, 2014. On December 31, 2014, Paul company sold equipment (with an original cost of $100,000 and accumulated depreciation of $50,000) to Saul Company for $97,500. This equipment has a remaining useful life of 5 years. During 2015, Saul Company sold land to Paul Company at a profit of $15,000. Paul still holds the land acquired from Saul. The inventory of Paul Company on December 31, 2015 included goods purchased from Saul Company on which Saul journalized a gross profit from the interco sale of $7,500. During 2016, Saul Company sold goods to Paul Company for $375,000, of which $160,000 was unpaid at December 31, 2016. The December 31, 2016 inventory of Paul Company included goods acquired from Saul Company on which Saul journalized a gross profit from the interco sale of $10,500. During 2016 Paul Company sold goods to Saul Company for $600,000 at a markup on sales of 20%. At December 31, 2016, 30% of these goods remain unsold by Saul Company. Saul Company still owes Paul Company $220,000 for these inventory purchases. On January 1, 2016 Saul Company reports $600,000 in bonds outstanding with a book value of $564,000. Paul purchases half of these bonds on the open market for $291,000. The intercompany bond transaction is attributed to the parent company. Required: Carefully Follow and label each step. 1. Prepare the acquisition analysis as of acquisition date. Compute the unamortized balance in the unrecorded manufacturing formulas as of 1/1/2016. 2. Analyze each intercompany transaction. Label as either upstream downstream. 3. Calculate Net Income Allocated to the Controlling Interest (aka consolidated net income) 4. Verify the calculation of the balance in the acccount equity in sub earnings and record the parent company entries with respect to its equity investment in sub for the year 2016. 5. Prepare all elimination entries for 2016. 6. Complete the consolidating spreadsheet for the year ended 12/31/2016. Total Points See separate tab for extra credit spreadsheet Points 10 15 20 20 20 15 100 Template INCOME STATEMENT FYE 12/31/16 Sales Equity in sub earnings Interest income-bonds Total revenues P CO. S CO. ELIMINATIONS DR. CR. 0 0 0 CONS.TOT. 2,555,500 58,400 33,000 2,646,900 1,120,000 1,730,000 654,500 690,500 251,000 72,000 2,384,500 1,013,500 2,420,500 905,500 72,000 0 0 3,398,000 262,400 106,500 368,900 Retained Earnings 1/1 636,100 139,500 Net income 262,400 106,500 Dividends declared 100,000 60,000 Retained Earnings 12/31 798,500 186,000 119,500 342,000 362,000 40,500 150,000 471,500 825,000 (207,000) 132,000 125,000 201,000 517,000 Cost of goods sold Expenses Interest expense-bonds Loss on bonds extinguishment Total expenses Net income 3,675,500 58,400 33,000 3,766,900 1,120,000 0 0 0 0 0 0 RETAINED EARNINGS STATEMENT 0 775,600 368,900 0 160,000 984,500 BALANCE SHEET Cash Accounts receivable Inventory Other current assets Land Investment in S Property and equipment Accumulated depreciation MFG formula Investment in S bonds Total assets Accounts payable Other liabilities Bonds payable Discount on bonds payable Common stock Paid in capital Retained earnings Noncontrolling interest in sub Total liabilities and equity 241,000 (53,000) 0 0 0 0 0 294,000 2,397,500 295,000 304,000 0 0 0 0 0 1,163,000 0 1,000,000 0 798,500 32,000 19,000 600,000 (24,000) 300,000 50,000 186,000 2,397,500 1,163,000 0 0 0 0 0 0 251,500 467,000 563,000 557,500 150,000 471,500 1,066,000 (260,000) 0 294,000 3,560,500 327,000 323,000 600,000 (24,000) 1,300,000 50,000 984,500 0 3,560,500 Template 0 0 0 0 Answer Sheet: Must use cell references from Spreadsheet Tab 1. What is the unamortized amount for the unrecorded manufacturing formula at January 1, 2016? 2. What amount of the intercompany Equipment gain or loss that must be confirmed (realized) in 2016? Enter as a positive value if gain or a negative value if loss. 3. What is the amount of the parent company intercompany inventory profit that must be unconfirmed (unrealized) in 2016? Enter as a positive value. 4. What is the amount of the subsidiary intercompany inventory profit that is confirmed (realized) in 2016? 5. What is the amount of the subsidiary intercompany inventory profit that is unconfirmed (unrealized) in 2016? Enter as a positive value. 6. What is the gain or loss on the extinguishment of the bond? Enter as a positive value if a gain and as as negative value if a loss. 7. What is the Net Income Attributed to the Controlling Interest (aka consolidated net income) for FYE 2016 ? 8. What is the net interest income or expense adjustment to net income to controlling interest? Enter as a positive if income or as a negative if expense 9. What are consolidated total assets in the Consolidated Balance Sheet? 10. What is the adjustment to the land account in the elimination entries? Enter as a positive amount. 11. What is the total elimination for intercompany sales in 2016? Include both upstream and downstream sales. 12. What is the total intercompany receivable and payables eliminated? 13. What is the amortization of the unrecorded manufacturing formula in 2016? Enter Here 0 0 0 0 WARNING! INSERTING OR CHANGING ANY FORMAT ON THIS SPREADSHEET WILL IMPACT YOUR GRADE Based on the same data, prepare the consolidated balance sheet. You must show the supporting elimination entries and analysis for the consolidated The extra credit is worth an additional 10 points with partial credit permitted; howeve no extra credit is awarded without supporting analysis and elimination entries. You must create the appropriate consolidation spreadsheet as well. for the consolidated balance sheet dit permitted; however, mination entries. Question 1 Paul will pay 533,000 for acquisition of equity and retained earnings. This will generate goodwill of 60,000. Since expected remaining useful life is 5 years, unamortized differential as of 1/1/2016 will be 42,000(12,000 for each year). Question 2 Upstream and downstream Upstream - Transaction from subsidiary to parent Downstream- Transaction from parent to subsidiary Date Dec-11 Dec-12 Dec-12 Dec-13 Dec-13 Dec-13 Comment Paul sold to Saul Saul sold to Paul Saul sold to Paul Saul sold to Paul Paul sold to Saul Paul sold to Saul Type of transaction Downstream Upstream Upstream Upstream Downstream Downstream Question 3 and 6 Income Statement(Excerpt) Sales 556,500 COGS 310,800 Sale of trademark 20,000 Net profit/Loss 265,700 Balance Sheet (Excerpt) Inventory Investment in subsidiary Question 4 180,000 80,000 31/12/201 6 31/12/201 6 31/12/201 6 Elimination entries Sale s X+7500 COGS X+7500 Sale 600,00 s 0 COGS 420,000 Inventory 180000 Sale 375,00 s 0 COGS 375,000 Comment Goods sold Saul Co. During 2016 Saul Company sold goods to Saul During 2016, Saul Company sold goods to Adam Co Question 5 Entries in Paul's books Issue of bond Cash Bonds purchase from market Cash 394,800 394,800 291,000 291,000 Question 1 Paul will pay 533,000 for acquisition of equity and retained earnings. This will generate goodwill of 60,000. Since expected remaining useful life is 5 years, unamortized differential as of 1/1/2016 will be 42,000(12,000 for each year). Question 2 Upstream and downstream Upstream - Transaction from subsidiary to parent Downstream- Transaction from parent to subsidiary Date Dec-11 Dec-12 Dec-12 Dec-13 Dec-13 Dec-13 Comment Paul sold to Saul Saul sold to Paul Saul sold to Paul Saul sold to Paul Paul sold to Saul Paul sold to Saul Type of transaction Downstream Upstream Upstream Upstream Downstream Downstream Question 3 and 6 Income Statement(Excerpt) Sales 556,500 COGS 310,800 Sale of trademark 20,000 Net profit/Loss 265,700 Balance Sheet (Excerpt) Inventory Investment in subsidiary Question 4 180,000 80,000 31/12/201 6 31/12/201 6 31/12/201 6 Elimination entries Sale s X+7500 COGS X+7500 Sale 600,00 s 0 COGS 420,000 Inventory 180000 Sale 375,00 s 0 COGS 375,000 Comment Goods sold Saul Co. During 2016 Saul Company sold goods to Saul During 2016, Saul Company sold goods to Adam Co Question 5 Entries in Paul's books Issue of bond Cash Bonds purchase from market Cash 394,800 394,800 291,000 291,000