Problem I. On January 1, 2019, P Corp acquired 80% of the outstanding common stock of s Corp for $820,000. On that date, S Company's stockholders' equity consisted of common stock, $150,000; other contributed capital, $200,000; and retained earnings, $350,000. P Corp paid more than the book value of net assets acquired because the recorded cost of s Corp's equipment (5 year remaining useful life) was $40,000 less than its fair value; the remainder was allocated to goodwill. There were acquisition related costs of $40,000 at the date of acquisition. During 2019 S Corp earned $240,000 and declared and paid a $80,000 dividend. P Corp used the equity method to record its investment in S Corp. In addition, P Corp sold (transferred) $100,000 of goods to S Corp. The goods cost P Corp $60,000. At the end of 2019, approximately $20,000 of the transfer remains unsold. During 2020 S Corp earned $280,000 and declared and paid a $90,000 dividend. The unsold goods from 2019 were all sold to 3rd parties. In addition, P Corp. sold (transferred) $120,000 of goods to S Corp. The goods cost P Corp $90,000. At the end of 2020, approximately $30,000 of the transfer remains unsold. Instructions: 1. Calculate the implied value of S Corp at January 1, 2019. 2. Prepare and compute the allocation of the difference between implied and book value as of January 1, 2019. 3. Prepare the entries to record the acquisition of S Corp at January 1, 2019. Prepare the T- account for the Investment in S Corp and Retained Earnings-S