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Preston Company acquired 80% of Sparkle Corporation's stock for S2.170 in cash on January 1, 2020, when Sparkle Corporation's book value was $500, consisting of $50 in capital stock, $435 in retained earnings, and $15 in accumulated other comprehensive income. The fair value of the noncontrolling interest was $430 at the date of acquisition. Preston uses the complete equity method to account for the investment on its own books 1. At the time of acquisition, all of Sparkle's assets and liabilities were reported at fair value, except for unreported identifiable intangible assets with a fair value of $30D. These intangibles are appropriately recorded as assets per ASC Topic 805, and have a remaining life of 2 years, straight- line as of the date of acquisition. Goodwill arising from this acquisition is tested annually for impairment, and impairment for 2020 is $300. It is now December 31, 2020, and you are preparing the consolidated financial statements. Sparkle reported net income of $750, an other comprehensive loss of $10, and declared and paid dividends of $100 for 2020. Required a. Calculate total goodwill at the date of acquisition and its allocation to the controlling and noncontrolling interest. Calculate equity in net income of Sparkle for 2020, as reported on Preston's separate books, and noncontrolling interest in net income of Sparkle for 2020, as reported on the consolidated income statement. b. c. Prepare the working paper entries to consolidate Preston and Sparkle's trial balances at December 31, 2020. 2. The trial balance of Salmon Company at January 1, 2019 is as follows, along with estimated fair values of its assets and liabilities: Book Value Fair Value Dr Dr Current assets Plant & equipment, net Client contracts Liabilities Capital stock Retained earnings Total 200 29,000 400 40,000 14,000) Information on the revalued assets and liabilities is as follows: e Life as of J 1, 2019 Current assets [inventory) Plant & e Client contracts FIFO, sold in 2019 20 straight-line straight-line 3 years, straight-line Goodwill No impairment Perch Corporation paid S80,000 in cash to acquire 90% of the voting stock of Salmon Company on January 1, 2019, The noncontrolling interest was valued at $7,000 at the date of acquisition. It is now December 31, 2020, two years after the acquisition. Salmon reported net income of $4,00O in 2020 and declared no dividends. Salmon's January 1, 2020 retained earnings balance is $1,000. Perch uses the complete equity method to account for the investment in Salmon on its own books Required a Calculate the total goodwill at January 1, 2019, and its allocation to the controlling and noncontrolling interest b. Calculate equity in net income of Salmon and the noncontrolling interest in net income of Salmon for 2020 c. Calculate the December 31, 2020 Investment in Salmon balance. d. Prepare the working paper entries to consolidate Perch and Salmon at December 31, 2020