when completing the differential table, please ignore the book values and fair values listed for the net identifiables assets in the paragraph on tab 1. instead, you should use the amounts shown in rows 14-18 on tab 1, including patents. Assume that patents have a life of 15 years.

1 Compr 2 3 AT&T spent $43,000,000 to buy 75% of the stock of Discovery on January 1, 2019. At that time, it was estimated that the fair value of the non controlling interest was $15,000,000. On the date of acquisition, Discovery had the following balances: Common Stock $50,000,000 5 and Retained Earnings $6,000,000. All of Discovery's assets and liabilities' book values aunlod their fair values except for inventory that 6 had a book value of S500,000 and a fair market value of $1,000,000, building & equipment with a book value of $100,000 a fair value of 7 $250,000 and bonds payable with a book value of $50,000 and fair value of $75,000. All of the inventory was sold in 2019, the bonds 8 payable and building & equipment cach has a 10 year remaining life as of the date of soquisition. No goodwill impairment has been recorded. 9 At December 31, 2021, Discovery owes AT&T $25,000 10 11 12 13 14 Book Value Fair Value 15 Inventory 503,169 1,003,169 16 Equipment 2,012,627 512,677 17 Bonds Payable 95,000 75,000 18 Patent 1,829,706 On December 31, 2021, the trial balances of the two companies are as follows: AT&T Company Discovery Company Item Debit Credit Debit Credit Cash 8,459,089 9,221,093 Accounts Receivable (15,319,538) 2,872,000 Land 3,341,330 10,063,385 Buildings & Equipment 1,667,290 40,253,540 Investment in Discovery 42,089,538 Cost of Goods Sold 3,522,173 669,250 Depreciation Expense 704,435 133,850 Other Expenses 1,408,869 267,700 Interest Expenses 2,677,000 Dividends Declared 30,000 20,000 Accumulated Depreciation 265,000 5,031,693 Accounts Payable 32,038,000 2,742,000 Bonds Payable 100,000 95,000 Common Stock 200,000 50,316,925 Retained Earings 664,330 2,638,200 Sales 14,088,690 2,677,000 Income from Subsidiary 1,224,165 48,580,186 48,580,185 63,500,818 63,500,818 Required: 1. Prepare the differential table as of the date of acquisition and complete the amortization expense columns for 2019, 2020 and 2021 on tab 2. (8 points) 2. Give the differential balance as of 1/1/2021 on tab 2. (2 points) 3. Prepare the equity method entries that AT&T Company made during 2021 to account for its investment in Discovery on tab 3.6 points) 4. Prepare the elimination entries as of December 31, 2021 on tab 4. (22 points) 5. Complete the consolidation worksheet as of December 31, 2021 on tab 5. (32 points) 1 Comprehensive Colldation in a Subsequent Year with a Consolidation Work 2 Requirement 1: Prepare the differential tableas of the date of squisition and complete the amortization expense columns for 2019, 2020 and 2021. (18 polnts) 4 Instruction propere the differential tables of the date of requisition and complete the amortization expense columns for 2019, 2020 and 2021. Be sure to prepare a complete table and do not love 5 cell Mank-puts of Banks will be graded as "hower." 5 7 Differential Life 2019 2020 2021 Book Value Fair Value 9 10 11 12 13 14 15 Requirement le the differential balance of 11/2001. (pont) 16 Differential Balance on 1/170211 17 Comprehensive Consolidation in a Subsequent Year with a Consolidation Worksheet Requirement 3: Prepare the equity method entries that AT&T Company made during 2021 to account for its Investment in Discovery. (6 points) Note: The T-sccounts Equity Method Entries Invc - 5 2 B 9 0 11 12 13 14 15 Inc 16 17 18 19 20 21 22 23 24 25 26 A Comprehensive Consolidation in a Subsequent Year with a Consolidation Worksheet Requirement 4: Prepare the elimination entries as of December 31, 2021. (22 points) Elimination Entries AT&T Discovery DR CR Consol 14,088,690 (3,522,173) (704,435) (1,408,869) (2,677,000) #VALUE! 2,677,000 (669,250) (133,850) (267,700) 664,330 2,638,200 (30,000) (20,000) 0 Income Statement 1 Sales 2 Less: Cost of Goods Sold 3 Less: Depreciation Expense 4 Less: Other Expenses S Less: Interest Expense 6 Income from Subsidiary 7 Consolidated Net Income 8 NCI in Net Income 9 Controlling Interest Net Income 0 1 Statement of Retained Earnings 2 Retained Earnings, Jan 1 3 Net Income (above) 4 Less: Dividends Declared 5 6 Retained Earnings, Dec. 31 7 8 Balance Sheet 9 Cash 0 Accounts Receivable 1 Land 2 Buildings & Equipment 3 Less: Accumulated Depreciation 4 5 Investment in S 6 -7 Patent 8 Differential 9 Goodwill 0 Total Assets 1 2 Accounts Payable 3 Bonds Payable 4 Discount on Bands Payable 5 Common Stock 6 Retained Earnings 7 8 NCHI NA of Discovery 9 Total Liabilities and Equity 8,459,089 (15,319,538) 3,341,330 1.667,290 9,221,093 2,872,000 10,063,385 40,253,540 (265,000) (5,031,693) 42.089,538 32,038,000 100,000 2,742,000 95.000 200,000 50,316,925 1 Compr 2 3 AT&T spent $43,000,000 to buy 75% of the stock of Discovery on January 1, 2019. At that time, it was estimated that the fair value of the non controlling interest was $15,000,000. On the date of acquisition, Discovery had the following balances: Common Stock $50,000,000 5 and Retained Earnings $6,000,000. All of Discovery's assets and liabilities' book values aunlod their fair values except for inventory that 6 had a book value of S500,000 and a fair market value of $1,000,000, building & equipment with a book value of $100,000 a fair value of 7 $250,000 and bonds payable with a book value of $50,000 and fair value of $75,000. All of the inventory was sold in 2019, the bonds 8 payable and building & equipment cach has a 10 year remaining life as of the date of soquisition. No goodwill impairment has been recorded. 9 At December 31, 2021, Discovery owes AT&T $25,000 10 11 12 13 14 Book Value Fair Value 15 Inventory 503,169 1,003,169 16 Equipment 2,012,627 512,677 17 Bonds Payable 95,000 75,000 18 Patent 1,829,706 On December 31, 2021, the trial balances of the two companies are as follows: AT&T Company Discovery Company Item Debit Credit Debit Credit Cash 8,459,089 9,221,093 Accounts Receivable (15,319,538) 2,872,000 Land 3,341,330 10,063,385 Buildings & Equipment 1,667,290 40,253,540 Investment in Discovery 42,089,538 Cost of Goods Sold 3,522,173 669,250 Depreciation Expense 704,435 133,850 Other Expenses 1,408,869 267,700 Interest Expenses 2,677,000 Dividends Declared 30,000 20,000 Accumulated Depreciation 265,000 5,031,693 Accounts Payable 32,038,000 2,742,000 Bonds Payable 100,000 95,000 Common Stock 200,000 50,316,925 Retained Earings 664,330 2,638,200 Sales 14,088,690 2,677,000 Income from Subsidiary 1,224,165 48,580,186 48,580,185 63,500,818 63,500,818 Required: 1. Prepare the differential table as of the date of acquisition and complete the amortization expense columns for 2019, 2020 and 2021 on tab 2. (8 points) 2. Give the differential balance as of 1/1/2021 on tab 2. (2 points) 3. Prepare the equity method entries that AT&T Company made during 2021 to account for its investment in Discovery on tab 3.6 points) 4. Prepare the elimination entries as of December 31, 2021 on tab 4. (22 points) 5. Complete the consolidation worksheet as of December 31, 2021 on tab 5. (32 points) 1 Comprehensive Colldation in a Subsequent Year with a Consolidation Work 2 Requirement 1: Prepare the differential tableas of the date of squisition and complete the amortization expense columns for 2019, 2020 and 2021. (18 polnts) 4 Instruction propere the differential tables of the date of requisition and complete the amortization expense columns for 2019, 2020 and 2021. Be sure to prepare a complete table and do not love 5 cell Mank-puts of Banks will be graded as "hower." 5 7 Differential Life 2019 2020 2021 Book Value Fair Value 9 10 11 12 13 14 15 Requirement le the differential balance of 11/2001. (pont) 16 Differential Balance on 1/170211 17 Comprehensive Consolidation in a Subsequent Year with a Consolidation Worksheet Requirement 3: Prepare the equity method entries that AT&T Company made during 2021 to account for its Investment in Discovery. (6 points) Note: The T-sccounts Equity Method Entries Invc - 5 2 B 9 0 11 12 13 14 15 Inc 16 17 18 19 20 21 22 23 24 25 26 A Comprehensive Consolidation in a Subsequent Year with a Consolidation Worksheet Requirement 4: Prepare the elimination entries as of December 31, 2021. (22 points) Elimination Entries AT&T Discovery DR CR Consol 14,088,690 (3,522,173) (704,435) (1,408,869) (2,677,000) #VALUE! 2,677,000 (669,250) (133,850) (267,700) 664,330 2,638,200 (30,000) (20,000) 0 Income Statement 1 Sales 2 Less: Cost of Goods Sold 3 Less: Depreciation Expense 4 Less: Other Expenses S Less: Interest Expense 6 Income from Subsidiary 7 Consolidated Net Income 8 NCI in Net Income 9 Controlling Interest Net Income 0 1 Statement of Retained Earnings 2 Retained Earnings, Jan 1 3 Net Income (above) 4 Less: Dividends Declared 5 6 Retained Earnings, Dec. 31 7 8 Balance Sheet 9 Cash 0 Accounts Receivable 1 Land 2 Buildings & Equipment 3 Less: Accumulated Depreciation 4 5 Investment in S 6 -7 Patent 8 Differential 9 Goodwill 0 Total Assets 1 2 Accounts Payable 3 Bonds Payable 4 Discount on Bands Payable 5 Common Stock 6 Retained Earnings 7 8 NCHI NA of Discovery 9 Total Liabilities and Equity 8,459,089 (15,319,538) 3,341,330 1.667,290 9,221,093 2,872,000 10,063,385 40,253,540 (265,000) (5,031,693) 42.089,538 32,038,000 100,000 2,742,000 95.000 200,000 50,316,925