Problem 3-30 (LO 3-1, 3-3, 3-6)

Giant acquired all of Smalls common stock on January 1, 2011. Over the next few years, Giant applied the equity method to the recording of this investment. At the date of the original acquisition, $126,000 of the fair-value price was attributed to undervalued land while $59,000 was assigned to equipment having a 10-year life. The remaining $77,000 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Following are individual financial statements for the year ending December 31, 2015. On that date, Small owes Giant $11,500. Small declared and paid dividends in the same period. Credits are indicated by parentheses. Giant Small Revenues $ (1,206,400 ) $ (524,000 ) Cost of goods sold 595,000 127,000 Depreciation expense 195,500 217,000 Equity in income of Small (174,100 ) 0 Net income $ (590,000 ) $ (180,000 ) Retained earnings, 1/1/15 $ (1,660,000 ) $ (654,000 ) Net income (above) (590,000 ) (180,000 ) Dividends declared 280,000 120,000 Retained earnings, 12/31/15 $ (1,970,000 ) $ (714,000 ) Current assets $ 351,500 $ 221,000 Investment in Small 1,116,500 0 Land 522,000 211,000 Buildings (net) 395,000 509,000 Equipment (net) 740,000 308,000 Goodwill 0 0 Total assets $ 3,125,000 $ 1,249,000 Liabilities $ (905,000 ) $ (365,000 ) Common stock (250,000 ) (170,000 ) Retained earnings(above) (1,970,000 ) (714,000 ) Total liabilities and equities $ (3,125,000 ) $ (1,249,000 )

a. How was the $174,100 Equity in Income of Small balance computed? b.Determine the totals to be reported by this business combination for the year ending December 31, 2015. c.

	Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2015. (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.)
	d. If Giant determined that the entire amount of goodwill from its investment in Small was impaired in 2015, what journal entry would Giant make to record such impairment? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)