Problem 2 (40 points) On 1/1/20x0, Prospector, Inc. acquired 100% of the outstanding common stock of Sinclair, Inc. for $650,000 cash and 22,000 common shares of their $1 par value common stock. At 1/1/20x1, their common stock traded on public markets for $4.00 per share. Following is Sinclair's pre-acquisition Balance Sheet at 1/1/20x1: Sinclair Company Balance Sheet 1/1/2000 Assets Liabilities and Equity Cash and short-term investments 570,000 Accounts payable 560.000 Accounts receivable 50,000 Noncurrent liabilities 180.000 Supplies 20.000. Common stock 300.000 Total Current Assets 1.40,000 Additional paid-in capital 60,000 Equipment, net 240,000 Retained camings. 1/1/20x0 120.000 Buildings, net 140,000 Land 40.000 Intangible assets 110.000 Total Assets 57720,000 Total Liabilities and Equity 720.000 In addition, Sinclair's assets and liabilities were understated as follows: Fair valus Remaining adjustment Useful life Equipment ($16,000) 8 years Buildings $100,000 20 years Land $74,000 Intangible assets $100,000 10 years Sinclair, Inc.'s net income and dividends declared and paid were: Eye 2020 Fve 2041 Net income 596,0005132,000 Dividends declared and paid $12,000 $36,000 For fiscal years 20x0 and 20x1, Sinclair did not issue additional common stock or other equity. Required A. Record Prospector Inc.'s acquisition of Sinclair Corporation at 1/1/20x0. B. Prepare a schedule showing the allocation of the purchase price to the fair value of the net assets acquired, including periodic depreciation/amortizations of the related purchase price adjustments. C. Prepare a schedule showing the computation of goodwill recorded at acquisition, if any. D. Prepare Prospector's journal entries for 20x0 and 20xl related to their acquisition of Sinclair Company. E. Prepare the consolidating worksheet journal entries for fiscal year- ending 20x0. F. Prepare the consolidating worksheet journal entries for fiscal year- ending 20x1