Sam purchased 60% of the outstanding common stock of Spice on 1/1/19 for $12 million in cash. Spice reported the following income (loss) and dividends for 2019 and 2020 (in 000's): 2019 2020 Net Income (400) 3,000 Dividends 500 1,500 The following are the fair value/book value amounts for Spice on 1/1/19 that a staff person has provided you (in 000's): Book Value Fair Values Cash 600 600 Receivables 1,500 1,500 Inventory (FIFO) 1,200 1,000 Plant & Equipment 10,000 8,000 Less: Accumulated Deprn. (3,000) Net PPE 7,000 Patent 5,000 Customer relationships 1,000 Trademark 3,000 Estimated value of operating synergies from the acquisition 4,000 Accounts Payable 1069.003 1069.003 Bond Payable 901.997 ? Common stock 5400 Retained Earnings 2929 The 1,000 $1,000 face bonds pays interest semi-annually on 6/30 and 12/31 and had 15 years until maturity at the Spice acquisition date. The bond was originally issued when the market rate was 6% with a coupon rate of 5%. On 1/1/19, the market rate was 3%. The plant & equipment had remaining useful lives of 10 years at 1/1/19 and the patent had a 10 year useful life at 1/1/19. Customer relationships estimated useful life is 5 years. Trademark has indefinite life. The operating synergies are expected to be beneficial over 5 years. a. Prepare the required consolidation entries for this subsidiary for 2020. All numbers on the worksheet are in 000's. Show all of your work in an organized, clear manner. b. Prepare the consolidated worksheet.