The individual financial statements for Peter Company and Smith Co. for the year ended December 31, 2016, are shown below. Peter acquired a 100 percent interest in Smith on January 1, 2015, in exchange for various considerations totaling $1,600,000. At the acquisition date Smiths book value was $1,225,000. Smith had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $250,000. This customer list is being amortized over 15 years. Reported income and dividends for Smith for 2015 were $276,000 of income with $82,000 paid in dividends. Income and dividends for Smith for 2016 were $196,000 of income with $45,000 paid in dividends.

1) Prepare the schedule that allocates the purchase price and determines the amount of Goodwill, if any, making sure to label items correctly.

2) Prepare all the consolidation worksheet adjustment entries for 2016, making sure to link them correctly to supporting data

3) Prepare a consolidation worksheet that includes beginning amounts, the posting of the entries on the worksheet, and final balances.

4) In addition, your final solution will include the supporting schedule for the determination of the *C worksheet entry.

The final solution will include an Excel worksheet uploaded to the Blackboard assignment, with all supporting information included and the worksheet linking properly to the appropriate calculated values. I have provided a worksheet framework for you to use should you choose to do so.

Accounts Sales Cogs Expenses Equity in Smith Income Separate company net income Peter (1,252,000) 784,000 165,000 (196,000) (499,000 Smith (786,000) 465,000 125,000 (196,000) (1,619,000) Retained Earnings 1/1 Retained Earnings 1/1 Net Income Dividends paid Retained Earnings 12/31 (499,000)| 120,000 (1,998,000)| (819,000) (196,000) 45,000 (970,000) Cash Receivables Inventory Investment in Smith 187,500 375,000 490,000 1,945,000 137,500 196,500 431,700 385,000 496,000 587,500 325,000 Land Buildings, and equip, net Goodwill Customer list Total Assets 3,878,500 | 1,678,200 (108,200) Current liabilities Bonds payable Discount on bonds Common Stock Additional Paid-In-Capital Retained Earnings 12/31 Total Liab, and SE (467,500) (500,000) 12,000 (825,000) (100,000) (1,998,000) (3,878,500)| (400,000) (200,000) (970,000) (1,678,200) Accounts Sales Cogs Expenses Equity in Smith Income Separate company net income Peter (1,252,000) 784,000 165,000 (196,000) (499,000 Smith (786,000) 465,000 125,000 (196,000) (1,619,000) Retained Earnings 1/1 Retained Earnings 1/1 Net Income Dividends paid Retained Earnings 12/31 (499,000)| 120,000 (1,998,000)| (819,000) (196,000) 45,000 (970,000) Cash Receivables Inventory Investment in Smith 187,500 375,000 490,000 1,945,000 137,500 196,500 431,700 385,000 496,000 587,500 325,000 Land Buildings, and equip, net Goodwill Customer list Total Assets 3,878,500 | 1,678,200 (108,200) Current liabilities Bonds payable Discount on bonds Common Stock Additional Paid-In-Capital Retained Earnings 12/31 Total Liab, and SE (467,500) (500,000) 12,000 (825,000) (100,000) (1,998,000) (3,878,500)| (400,000) (200,000) (970,000) (1,678,200)