Question Three: (12 Points) (B1, C1, and C2) On January 1, 2017, X Corporation paid $450,000 for 75% of the outstanding S1 par common stock of Y Company and $80,000 for legal fees in connection with the business combination. On that date, Y 's stockholders' equity was as follows: Current fair values of Y's inventories (first-in, first-out cost) and depreciable plant assets (net) exceeded their carrying amounts by $20,000 and $90,000, respectively. Current fair values of Y's other identifiable net assets equaled their carrying amounts on that date. Y's plant assets had a nine years of useful life. During that year 30% of the inventories were sold. At the end of the year, Y had a net income of $80,000, but did not declare dividends (Zero dividends), and the goodwill was impaired by 10%. Instructions: a. Prepare X Corporation's journal entries to record the business combination of X and Y Company on January 1, 2017. (4 Points) b. Prepare the amortization schedule for X Corporation and subsidiary at the end of 2017. (4 Points) c. Prepare X Corporation's journal entries, under the equity method of accounting, to record Y Company's operating results for the fiscal year ended December 31, 2017. (2 Points) d. Calculate the total amount of the investment account and the minority interest at the end of the year. (2 Points) Answer: a. Prepare X Corporation's journal entries to record the business combination of X and Y Company on January 1 , 2017. (4 Points) b. Prepare the amortization schedule for X Corporation and subsidiary at the end of 2017. (4 Points) Total Year Parent ( \%) Minerity ( \%) Total c. Prepare X Corporation's journal entries, under the equity method of accounting, to record Y Company's operating results for the fiscal year ended December 31, 2017. (2 Points) d. Calculate the total amount of the investment account and the minority interest at the end of the year. (2 Points)