Question 1: (18 marks)  On January 1, 2014, Cat Corporation purchased common shares of Mouse Limited for $2,500,000. On that date the net assets of Mouse had a book value of $8,800,000 and all of the individual assets of Mouse had fair values that were equal to their book values except for:    Fair Value Book value Machine (remaining life of 4 years) $1,000,000 $ 800,000  The following relates to Mouse since the acquisition date: Year Net Income Dividends paid 2014 $ 510,000 $ 270,000 2015  500,000  160,000  In 2015, there was a goodwill impairment loss equal to 10% of the goodwill created at acquisition date. On January 15, 2016, the market value of 25% of Mouse common shares was $1,800,000 and this decline was considered permanent.  Required: Prepare all the journal entries that Cat should make regarding this investment in Mouse for 2014, 2015 and on January 15, 2016 assuming the following two independent cases: a) Cat owns 25% of common shares of Mouse (13 marks) b) Cat owns 25% of common shares of Mouse. There is only one other shareholder who owns 75% of the Mouse common shares. (5 marks)  Round to the nearest dollar. Show all work and schedules  Hint: Acquisition differential = $300,000  Try and review solution to chapter 2 extra homework question prior to completing this question.