Problema examen Capitulo 4,5 On January 1, 2020, John Doe Enterprises (JDE) acquired a 55% interest in Bubba Manufacturing, Inc. (BMI). JDE paid for the transaction with $3 million cash and 500,000 shares of JDE common stock (par value $1.00 per share). At the time of the acquisition, BMI's book value was $16,970,000. On January 1, JDE stock had a market value of $14.90 per share and there was no control premium in this transaction. Any consideration transferred over book value is assigned to goodwill. BMI had the following balances on January 1, 2020. Book Fair Value Value Land $1,700,000 $2,550,000 Buildings (seven-year remaining life) 2,700,000 3,400,000 Equipment (five-year remaining life) 3,700,000 3,300,000 For internal reporting purposes, JDE employed the equity method to account for this investment. The following account balances are for the year ending December 31, 2020 for both companies. John Doe Bubba Enterprises Manufacturing Revenues Expenses $298,000,000 $103,750,000 271,000,000 Equity in income of Bubba Manufacturing Net income 4,361,500 95,800,000 0 $1 $( 31,361,500) 7,950,000) Retained earnings, January 1, 2020 Net income (above) Dividends paid $ 2,500,000 $ 100,000 31,361,500 7,950,000 (5,000,000) 3,000,000) Retained earnings, December 31, 2020 $ 28,861,500 $ 5,050,000 Current Assets Investment in Bubba Manufacturing Land Buildings Equipment (net) Total assets $ 30,500,000 $ 20,800,000 13,161,500 1,500,000 1,700,000 5,600,000 2,360,000 3,100,000 2,960,000 $ $ 53,861,500 27,820,000 Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings, Dec. 31, 2020 (above) Total liabilities and stockholders' equity $ 3,100,000 $ 4,900,000 1,000,000 2,900,000 6,000,000 19,000,000 10,870,000 28,861,500 5,050,000 $ 53,861,500 $ 27,820,000 Required: 1.Determine the consideration paid by JDE in the acquisition 55% shares Bubba Manufacturing 2.Calculate the amount of Investment and the non-controlling interest January 1 2020 3. Prepare a schedule to determine valuation difference and goodwill, and the amortization for the first year 4. Show haw JDE determin the $13,161,500 investment balance and the controlling interest balance as of December 31 2020 5.Prepare the Consolidation adjustment for December 31 2020 6.Prepare a consolidation worksheet for this business combination. Assume goodwill has been reviewed and there is no goodwill impairment.