Stevens Company Date of Acquisition - January 1, 2014 On January 1, 2014, Palmer Company acquired a 90% interest in Stevens Company at a cost of $1,000,000 cash. An examination of Stevens Company's assets and liabilities revealed the following at the date of acquisition: Stevens Company Balance Sheet As of January 1, 2014 Book Value Fair Value Cash 130,726 130,726 Accounts receivable 200,000 200,000 Inventories 160,000 210,000 Equipment, net 200,000 260,000 Land 190,000 290,000 Other 54,830 54,830 Total assets 935,556 Note payable 40,000 40,000 Bonds payable 205,556 205,556 Common stock 500,000 Retained earnings 190,000 Total liabilities and equity 935,556 Additional Information-Date of Acquisition Stevens Company's equipment had an original life of 15 years and a remaining useful life of 10 years. All the inventory was sold in 2014.Palmer Company Date of Acquisition - January 1, 2014 (before acquisition of Stevens was made) Book Value Cash 1,179,300 Accounts receivable 222,600 Note receivable 40,000 Inventory 130,400 Equipment, net 200,000 Land 160,000 Total 1,932,300 Accounts payable 270,500 Common stock 400,000 Other contributed capital 1,000,000 Retained earnings 261,800 Total 1,932,300 Additional Information - Date of Acquisition Note the following transaction of interest between Palmer and Stevens: a) Stevens Company's notes payable included $40,000 due to Palmer Company.Using the information provided for the Palmer Company (parent) and the Stevens Company (subsidary) complete the various tasks outlined below: As of Date of Acquisition 1. Prepare the journal entry to record Palmer's investment in Stevens. (tab 3) 2. Prepare the Computation and Allocation of Differences schedule for the acquisition of Stevens company (tab 4), and the eliminating entries and the consolidation worksheet as of the acquisition date. (tab 5 & 6) For year ended December 31, 2014 1. Prepare the eliminating entries and the consolidation worksheet as of December 31, 2014. (tab 8 & 9) For year ended December 31, 2016 (note - we are skipping year ended 2015) 1. Prepare the eliminating entries and the consolidation worksheet as of December 31, 2016. (tab 11 & 12) Palmer uses the cost method of accounting for its investments.Trial Balance As of December 31, 2014 Cost Method Cost of sales Depreciation expense Other expenses Dividends declared Cash Accounts receivable Inventories Investment in Stevens Equipment, net Land Total debits Sales Dividend income Accounts payable Bonds payable Common stock Retained earnings Total credits Palmer Co. 425,000 30,000 135,000 145,000 212,000 220,900 99,400 1,000,000 210,000 360,000 2,837,300 805,000 36,000 334,500 400,000 1,000,000 261,800 2,837,300 Stevens Co 220,000 20,000 30,000 I 40,000 .| 157,500 271,000 89,500 200,000 290,000 1,318,000 420,000 208,000 500,000 190,000 1,318,000 Note: Income statement accounts have not yet been closed out to retained earnings. As of December 31, 2016 Cost Method Cost of sales Depreciation expense Other expenses Dividends declared Cash Accounts receivable Inventories Investment in Stevens Equipment, net Land Total debits Sales Dividend income Accounts payable Bonds payable Common stock Retained earnings Total credits Palmer Co. 430,000 30,000 60,000 120,000 201,200 221,000 100,400 1,000,000 150,000 360,000 2,672,600 620,000 31,500 323,500 400,000 1,000,000 297,600 2,672,600 Stevens Co 240,000 20,000 35,000 35,000 191,000 273,000 81,000 160,000 290,000 1,325,000 340,000 135,000 500,000 350,000 1,325,000 Note: Income statement accounts have not yet been closed out to retained earnings