PROBLEM #2 On January 1, 2018, Bayer Corporation acquired 100 percent of Monsanto Company's Outstanding common stock. In exchange for Monsanto's stock, Bayer paid $650,000 in cash directly to the selling stockholders of Monsanto. The two companies continued to operate as separate entities after the combination. Immediately prior to the combination. the book values and fair values of the Monsanto's assets and liabilities were as follows: Book Value Fair Value Balance Sheet Cash 9,000 9,000 Receivables (net) 30,000 30,000 Inventory 68,000 62,000 Land 50,000 80,000 Patent 40,000 Buildings 8 Equipment 450,000 500,000 Total Assets 607,000 ?21,000 Current Payablas 29,000 29,000 Bonds Payable 100,000 90,000 Common Stock 200,000 Additional Paid-In Capital 130,000 Retained Earnings 148,000 Total Liabilities 8. Equity 60? 000 Assume the differences in the book values to fair values are as follows: inventory 1-year, land indefinite, patent 10-years. building and equipment 10-years. and bonds payable 2-years. Required. 1. Prepare. in good form, an allocation schedule of the excess fair value of the compensation paid by Bayer and calculate the annual excess amortization. 2. Prepare thejoumal entry to record the business combination on the books of Bayer Corporation as of 11' 1f 18 if the two entities continue to exist and that separate entities. 3. Prepare thejoumal entry to record the business combination on the books of Bayer Corporation as of 1l1f18 if Monsanto was dissolved and was no longer an operating entity. 4. Prepare elimination entry \"A" for 2018 and 2019