On January 1, 20X0, Mariachi Corporation acquired 70% of the outstanding shares of Sombrero Company for $ 85,000 cash. On that date, Sombrero Company had $ 35,000 of common shares outstanding and $ 25,000 of retained earnings. On January 1, 20X0, the carrying values of each of Sombrero Company€™s identifiable assets and liabilities were equal to their fair value except for the following:

The equipment had a useful life of 10 years as at January 1, 20X0, and all inventory was sold during 20X0. The following are the separate entity financial statements for Mariachi and Sombrero at December 31, 20X5:
Statements of Financial Position
December 31, 20X5

Additional Information
1. On January 1, 20X2, Mariachi sold Sombrero a trademark with a net carrying value of $ 20,000 for cash consideration of $ 28,000. The trademark has an indefinite useful life. On July 1, 20X5, Sombrero sold the trademark to an unrelated company for cash consideration of $ 40,000.
2. Sombrero sells goods to Mariachi at 25% above cost. Total sales from Sombrero to Mariachi during 20X5 were $ 50,000, of which $ 20,000 remained in Mariachi€™s inventory at year end. Mariachi still owed Sombrero $ 18,000 for this inventory at December 31, 20X5. In 20X4, total sales from Sombrero to Mariachi were $ 40,000, of which $ 10,000 remained in Mariachi€™s inventory at year end.
3. Mariachi uses the cost method to account for its investment in Sombrero. Both companies pay income taxes at a rate of 40%, and have done so since 19X9. None of the transactions detailed above are considered capital gains for tax purposes. Ignore future taxes when calculating the purchase price discrepancy.
4. Each year, goodwill is evaluated to determine if there has been permanent impairment. To date there has been no impairment in value.

Required
1. Prepare a calculation for the purchase price discrepancy and goodwill as of January 1, 20X0.
2. Prepare a consolidated statement of income for the year ended December 31, 20X5.
3. What would the balance be for each of the following consolidated statement of financial position accounts as at December 31, 20X5?
a) Accounts receivable
b) Inventory
c) Equipment
d) Non-controllinginterest

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Carrying value $25,000 10,000 Fair value Inventory Equipment $35,000 30,000 Mariachi 120,000 90,000 250,000 225,000 85,000 $770,000 $230,000 70000 300,000 200,000 270,000 $770,000 Cash Accounts receivable Inventory Capital assets-net Investment in Sombrero Total Sombrero 20,000 65,000 90,000 150,000 325,000 $180,000 60,000 240,000 35,000 50,000 325,000 Accounts payable Deferred income taxes Common shares Retained eamings Total Statements of Comprehensive Income Year Ended December 31, 20X5 Mariachi Sombrero $600,000 (450,000) 150,000 ales Cost of goods sold Gross margin Dividend income Gain on sale of trademark Amortization expense Other expenses Income tax expense Net income and comprehensive income 750,000 (500,000 250,000 21,000 (35,000) (86,000) (60,000 12,000 (20,000) (62,000) 48,000 Statements of Changes in Equity -Retained Earnings Section Year Ended December 31, 20X5 32,000 48,000 (30,000 50,000 $180,000 90,000 Retained eamings, beginning of year Net income Dividends paid Retained earnings, end of year 270,000