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On January 3, 2019, Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc., in exchange for $6,489,000 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 $2,516,500 including retained earnings of $1,716,500. 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 $ 147,500 $ 64,500 Fair Value $ 2,352,500 $ 1,624,500 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: 2019 2020 2021 Net Income $ 900, 300 940,300 975, 300 Dividends $ 150,000 150,000 150,000 December 31, 2021, financial statements for each company follow. Parentheses indicate credit balances. Dividends declared were paid in the same period. Persoff Sea Cliff $ (2,750,000) 1,364,700 282,500 379,000 (530,300) $ (1,254,100) $(2,265,000) 875,700 386,000 28,000 $ (975, 300) $ (7,485,000) (1,254,100) 600,000 $ (8, 139, 100) $(3,257,100) (975,300) 150,000 $(4,082,400) 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 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 $ 382,500 49,500 86,000 $ 503,500 7,519,900 315,000 818,000 106,000 1,845,500 $ 11, 107,900 $ (968,800) (2,000,000) (8, 139, 100) $(11, 107,900) 4,530,000 $ 5,048,000 $ (165,600) (800,000) (4,082,400) $(5,048,000) Note: Parentheses indicate a credit balance. a. Determine the fair value in excess of book value for Persoff's acquisition date investment in Sea Cliff. b. Determine Persoff's Equity earnings in Sea Cliff's balance for the year ended December 31, 2021. c. Determine Persoff's December 31, 2021, Investment in Sea Cliff's balance. d. Prepare a worksheet to determine the consolidated values to be reported on Persoff's financial statements. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Determine the fair value in excess of book value for Persoff's acquisition date investment in Sea Cliff. Fair value in excess of book value Determine Persoff's Equity earnings in Sea Cliff's balance for the year ended December 31, 2021. Amounts Equity earnings in Sea Cliff Determine Persoff's December 31, 2021, Investment in Sea Cliff's balance. Amounts Investment in Sea Cliff Required A Required B Required C Required D Prepare a worksheet to determine the consolidated values to be reported on Persoff's financial statements. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.) Show less Consolidated Totals PERSOFF CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year December 31, 2021 Consolidation Entries Accounts Persoff Sea Cliff Debit Credit Income Statement Revenues $ 2,750,000) $ (2,265,000) Cost of goods sold 1,364,700 875,700 Depreciation expense 282,500 386,000 Amortization expense 379,000 28,000 Equity earnings in Sea Cliff (530,300) Net income $ (1,254,100) $ (975,300) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (7,485,000) (3,257,100) (1,254,100) (975,300) 600,000 150,000 $ 8,139,100) $ (4,082,400) Balance Sheet Current assets Investment in Sea Cliff Computer software Patented technology Goodwill Equipment Total assets $ 503,500 $ 382,500 7,519,900 315,000 49,500 818,000 86,000 106,000 0 1,845,500 4,530,000 $ 11,107,900 $ 5,048,000 Liabilities Common stock Retained earnings 12/31 Total liabilities and equity (968,800) (165,600) (2,000,000) (800,000) (8, 139, 100) (4,082,400) $(11, 107,900) $ (5,048,000) 8,139,100