The following are selected accounts and balances for Mergaronite Company and Hill, Inc., as of December 31, 2021. Several of Mergaronites accounts have been omitted. Credit balances are indicated by parentheses. Dividends were declared and paid in the same period.

Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 7,600 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2017, Hills land was undervalued by $20,800, its buildings were overvalued by $29,400, and equipment was undervalued by $59,600. The buildings had a 10-year remaining life; the equipment had a 5-year remaining life. A customer list with an appraised value of $108,000 was developed internally by Hill and was estimated to have a 20-year remaining useful life.

Required A:

Determine the December 31, 2021, consolidated totals for the following accounts:

Required B:

In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary?

Yes or No

Required C:

If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet? (Please indicate which are debit entries and which are credit entries)

1. Prepare Entry S to eliminate the beginning stockholders' equity of the subsidiary.
2. Prepare Entry A to recognize the unamortized allocation balances as of the beginning of the current year.
3. Prepare Entry I to remove the equity income recognized during the year - equity method.
4. Prepare Entry D to remove the Intra-entity dividend declarations.
5. Prepare Entry E to recognize the excess acquisition-date fair-value amortizations for the period.

\begin{tabular}{lcr} & Mergaronite & Hill \\ Revenues & $(598,000) & $(248,000) \\ Cost of goods sold & 290,000 & 90,000 \\ Depreciation expense & 108,000 & 42,000 \\ Investment income & NA & NA \\ Retained earnings, 1/1/21 & (880,000) & (604,000) \\ Dividends declared & 122,000 & 38,000 \\ Current assets & 188,000 & 678,000 \\ Land & 318,000 & 94,000 \\ Buildings (net) & 508,000 & 156,000 \\ Equipment (net) & 190,000 & 248,000 \\ Liabilities & (416,000) & (316,000) \\ Common stock & (306,000) & (38,000) \\ Additional paid-in capital & (48,000) & (922,000) \\ \hline \end{tabular} \begin{tabular}{l|l} \hline Revenues & ConsolidatedTotals \\ \hline Cost of goods sold & \\ \hline Depreciation expense \\ \hline Amortization expense \\ \hline Buildings \\ \hline Equipment & \\ \hline Customer list & \\ \hline Common stock & \\ \hline Additional paid-in capital & \\ \hline \end{tabular} \begin{tabular}{lcr} & Mergaronite & Hill \\ Revenues & $(598,000) & $(248,000) \\ Cost of goods sold & 290,000 & 90,000 \\ Depreciation expense & 108,000 & 42,000 \\ Investment income & NA & NA \\ Retained earnings, 1/1/21 & (880,000) & (604,000) \\ Dividends declared & 122,000 & 38,000 \\ Current assets & 188,000 & 678,000 \\ Land & 318,000 & 94,000 \\ Buildings (net) & 508,000 & 156,000 \\ Equipment (net) & 190,000 & 248,000 \\ Liabilities & (416,000) & (316,000) \\ Common stock & (306,000) & (38,000) \\ Additional paid-in capital & (48,000) & (922,000) \\ \hline \end{tabular} \begin{tabular}{l|l} \hline Revenues & ConsolidatedTotals \\ \hline Cost of goods sold & \\ \hline Depreciation expense \\ \hline Amortization expense \\ \hline Buildings \\ \hline Equipment & \\ \hline Customer list & \\ \hline Common stock & \\ \hline Additional paid-in capital & \\ \hline \end{tabular}