Upayu is usy siya tury. LIUS I may improve the responsiveness of your Mac. Chapter 3 HW Saved On January 3, 2016. Persoft Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc. in exchange for $10,075,000 in cash. Persoff elected to exercise control over Sea Cliff as a wholly owned subsidiary with an independent accounting system. Both companies have December 31 fiscal year-ends. At the acquisition date. Sea Cliff's stockholders' equity was $2,637,500 including retained earnings of $1,837,500 Don Persoff pursued the acquisition, in part, to utilize Sea Cliff's technology and computer software. These items had fair values that differed from their values on Sea Cliff's books as follows: Remaining Useful Life Asset Patented technology Computer software Book ValuePair Value $ 202,500 $ 3.177.500 97.500 4.297,500 12 years Sea Cliff's remaining identifiable assets and liabilities had acquisition-date book values that closely approximated fair values. Since acquisition, no assets have been impaired. During the next three years, Sea Cliff reported the following income and dividends: 2016 2017 Net Income $902,500 942.500 977,500 Dividends $ 150.000 150,000 150,000 December 31, 2018, financial statements for each company appear below. Parentheses indicate credit balances. Dividends declared were paid in the same period. Income statement Sea Clie $ 2,990,000) 1.472.500 337,500 445,000 $12,375,000) 917,500 430,000 50.000 Cost of goods sold Depreciation expense Amortization expense Equity earnings in tea clit Net Income Statement of Retained Earnings Retained earnings 1/1 Netcome Dividends declared Retained earnings 12/31 $ (917.500) $ (977.500) $17.595,000) (917,500) 600,000 $ (7.912,500) $3,302,500) 977.500) 150.000 S4,210,000) $ 437,500 Current assets Investment in Sea Cliff Computer software Patented technology 602,500 10.122,500 425,000 950.000 32.500 130,000 Goodwill Equipment Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity 150,000 1,922,500 $ 14,172,500 $ (4,260,000) (2,000,000) (7,912,500) $(14,172,500) 4,750,000 $5,400,000 $ (390,000) (800,000) 16,210,000) $(5,400,000) ? Note: Parentheses indicate a credit balance. Print a. Determine the fair value in excess of book value for Persoff's acquisition date investment in Sea Cliff b. Determine Persoff's Equity earnings in Sea Cliff's balance for the year ended December 31, 2018 c. Determine Persoff's December 31, 2018, Investment in Sea Cliff's balance. d. Prepare a worksheet to determine the consolidated values to be reported on Persoff's financial statements References Complete this question by entering your answers in the tabs below. Required A Required B Required C Required Determine Persoff's Equity earnings in Sea Cliff's balance for the year ended December 31, 2018 Equity earnings in Sea Clin Goodwill Equipment Total assets Liabilities Common stock Retained earnings 12/31 Total liabilities and equity 150,000 1.922,500 $ 14,172,500 $ (4,260,000) (2,000,000) 2,912,500) $(14,172,500) 4,750,000 $ 5,400,000 $ (390,000) (800,000) (4,210,000) $(5,400,000) Note: Parentheses indicate a credit balance. a. Determine the fair value in excess of book value for Persoff's acquisition date investment in Sea Clift b. Determine Persoff's Equity earnings in Sea Cliff's balance for the year ended December 31, 2018 c. Determine Persoff's December 31, 2018, Investment in Sea Cliff's balance. d. Prepare a worksheet to determine the consolidated values to be reported on Persoff's financial statements References Complete this question by entering your answers in the tabs below. Required A Required B Required Required D Determine Persoff's December 31, 2018, Investment in Sea Cliff's balance. Investment in Sea Cint Show less Consolidated Totals PERSOFF CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year December 31, 2018 Consolidation Entries Accounts Persoff Sea Cliff Debit Credit Income Statement Revenues S (2.970,000) $ 2.375,000) Cost of goods sold 1,472,500 917.500 Depreciation expense 337,500 430,000 Amortization expense 445,000 30,000 Equity earnings in Sea Cliff (202.500) Net income 1917,500) $ (977.500) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (7.595,000) (917.500) 600.000 $ (7.912,500) (3,382,500) (977,500) 150.000 S (4,210,000) $ 437,500 Balance Sheet Current assets Investment in Sea Cliff Computer software Patented technology Goodwill Equipment Total assets 602,500 10,122 500 425,000 950.000 150 000 1,922.500 $ 14,172.500 82,500 130.000 4.750,000 $ 5400.000 Common stock Retained earnings 12/31 (4.250.000) 390,000) (2.000.000) (800,000) (7.912,500) (4,210,000) (14.172.500) 5 (5.400.000) Total labeties and equity s ls