Q1: Consolidated Financial Statements and Goodwill Impairment (20 POINTS) On January 1, 2021, Waddington Company acquired Middleton Co. by issuing 55,000 shares of its common Stock with a market value of $20 per share. A building on sub's books was undervalued by $100,000, resulting in annual amortization of $10,000. Also, there was an unrecorded customer list valued at $150,000, resulting in annual amortization of $15,000; as well as a 10-year franchise agreement valued at $125,000. The separate 2021 financial statements for Waddington and Middleton follow Sales revenue Cost of goods sold Gross profi Operating expenses Equity income Net Income Waddington $3,600,000 (2,520,000) 1,080,000 (684,000) 99.000 $_495.000 Middleton S 975,000 (585.000) 390,000 (253,500) $ 136.500 Retained Earnings, 1/1/21 Net income Dividends Retained Earnings, 12/31/21 $1,830,500 495,000 (32.040) $2.293.460 $ 503,750 136,500 (20,475) $ 619.775 $ 477,425 290,550 $ 772,275 698,400 1,178,525 3.719.520 $6,368,720 537.550 $1.305.525 Cash and receivables Inventory Equity investment Property, plant & equipment (Net) Total Assets Accounts payable Accrued liabilities Notes payable Common stock Additional paid-in capital Retained Earnings, 12/31/11 Total Liabilities and Equities $ 263,520 313,200 1,250,000 407,000 1,824,040 2.293.400 $6.368.720 $ 92,950 121,550 325,000 65,000 81,250 619.775 $1.305.525 a. Prepare FV allocation schedule b. Prepare all necessary consolidation entries for 2021 consolidated financial statements. C. Now assume that at year-end a goodwill impairment test is conducted before the consolidated statements are issued. The estimated fair value of the subsidiary is $1,100,000. The fair value of the identifiable net assets is $1,050,000. Prepare any journal entries resulting from the test