What is the solution to this problem?

Giant acquired all of Smalls common stock on January 1, 2011. Over the next few years, Giant applied the equity method to the recording of this investment. At the date of the original acquisition, $115,500 of the fair-value price was attributed to undervalued land while $61,000 was assigned to equipment having a 10-year life. The remaining $73,800 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill.

Following are individual financial statements for the year ending December 31, 2015. On that date, Small owes Giant $12,200. Small declared and paid dividends in the same period. Credits are indicated by parentheses.

	Giant			Small
Revenues	$	(1,366,600	)	$	(439,500	)
Cost of goods sold		615,000			92,500
Depreciation expense		212,500			200,000
Equity in income of Small		(140,900	)		0
Net income	$	(680,000	)	$	(147,000	)
Retained earnings, 1/1/15	$	(1,620,000	)	$	(685,000	)
Net income (above)		(680,000	)		(147,000	)
Dividends declared		320,000			100,000
Retained earnings, 12/31/15	$	(1,980,000	)	$	(732,000	)
Current assets	$	428,200		$	285,000
Investment in Small		1,121,800			0
Land		506,000			215,000
Buildings (net)		360,000			518,000
Equipment (net)		711,000			319,000
Goodwill		0			0
Total assets	$	3,127,000		$	1,337,000
Liabilities	$	(897,000	)	$	(435,000	)
Common stock		(250,000	)		(170,000	)
Retained earnings(above)		(1,980,000	)		(732,000	)
Total liabilities and equities	$	(3,127,000	)	$	(1,337,000	)

a.	How was the $140,900 Equity in Income of Small balance computed?

b.	Determine the totals to be reported by this business combination for the year ending December 31, 2015.

c.

Prepare a consolidation worksheet for Giant and Small for the year ending December 31, 2015. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)