The X Company on December 31st, 2020 purchased 80% of the Y Company for $800,000 plus they made an agreement to pay an additional $80,000 in two years if sales grew by more than 30% over the two year period. An independent appraiser stated that the contingent consideration could have been settled by paying $30,000 at the date of acquisition. On this date the inventory of Y had a fair value of321,250, land had a fair value of $136,500 and plant and equipment had a fair value of $546,00. The balance sheets of X and Y at December 31st.2020, are given below:- X y 

Cash……………………………………………………………….$ 19,500……………………………………$ 9,750 Accounts receivable………………………………………. 171,950…………………………………… 68,250 Inventory………………………………………………………… 175,500………………………………….. 312,000 Land……………………………………………………………….. 136,500…………………………………. 78,000 Plant & Equipment………………………………………….. 602,000………………………………… 565,500 Investment in Y……………………………………………….. 900,000………………………………….. 0…. Goodwill…………………………………………………………. 175,500……………………………….. 58,500 TOTAL ASSETS………………………………………………..$2,180,950………………………….$1,092,000 Current liabilities……………………………………………$ 234,000………………………………… $156,000. Long term debt……………………………………………… 724,000………………………………….. 429,000 Common shares……………………………………………... 780,000…………………………………. 585,000 Retained Earnings…………………………………………… 442,950…………………………………. ( 78,000) TOTAL LIABILITIES&OWNER’S EQUITY……………$2,180,950………………………………$1,092,000

Required:- Calculate the goodwill on consolidation (6marks)

Prepare the consolidated balance sheet at the date of acquisition(15 marks)

Assume that the accountants of X used the working paper method to prepare the consolidated balance, prepare the eliminating entry at acquisition under this method(4)