QUESTION:

Prepare a consolidated balance sheet as of December 31, 2021

Gamma acquired 60% of Delta's shares on January 1, 2021 paying $500,000 in cash. Delta's balance sheet as of January 1, 2021 and the fair value of Delta's assets and liabilities were as follows: The useful life of the plant equipment is 5 years starting January 1, 2021. The turnover of shortterm assets and liabilities is less than one year. Additionally, during the due-diligence process, Gamma found out that Delta has unrecorded liabilities for product warranties for $100,000 that will be likely exercised over 4 years starting January 1,2021. During 2021, Delta's Net Income was $355,000 and Delta paid $50,000 in dividends. In addition, as of December 31, 2021 Gamma determined a goodwill impairment charge equal to $90,000 related to Delta's acquisition. Below are Gamma's and Delta's Balance Sheets and Income Statements for the year ended December 31, 2021