Roller Corporation acquired the voting stock of Homedepo Company on January 1, 2020 for $25 million in cash and stock. At the date of acquisition, Homedepos book value totaled $3 million, consisting of $1.6 million in capital stock, $1.8 million in retained earnings, and $400,000 in accumulated other comprehensive losses. Homedepos reported net assets at the date of acquisition were carried at amounts approximating fair value, except its inventory was overvalued by $500,000 (sold in 2020), its plant assets (10- year life, straight-line) were overvalued by $3,500,000, and its long-term debt (premium amortized over 10 years, straight-line) is undervalued by $100,000. Homedepo also had previously unreported identifiable intangibles (5-year life, straight-line) valued at $5,000,000. It is now December 31, 2020. Homedepo reports net income of $1,200,000 and other comprehensive income of $50,000 for 2020 and declares and pays dividends of $200,000. None of the revaluations are impaired in 2020. Roller uses the complete equity method to account for its investment.

11. How much is the goodwill incurred at date of acquisition? Show your calculations below: (25 pts)

12. What is 2020 equity in net income of Homedepo, reported on Rollers books? (20 pts)

13. What eliminating entry (O) should be recorded? (20 pts)