Puffin Industries acquired all of Sunset Coast Digital's stock on December 31,2011, for $3,500,000, $2,100,000 in excess

Question:

Puffin Industries acquired all of Sunset Coast Digital's stock on December 31,2011, for $3,500,000, $2,100,000 in excess of book value. At that time, Sunset Coast's inventory (LIFO) was overvalued by $500,000 and its plant assets (10-year life) were overvalued by $1,000,000. The remaining excess of cost over book value is attributed to undervalued identifiable being amortized over 20 years. Sunset Coast depreciates plant assets and amortizes intangibles by the straight-line method. During the next three years Sunset Coast reported total income of $850,000 and paid out 50 percent in dividends. Puffin carries its investment in Sunset Coast using the complete equity method. Sunset Coast's inventory increased each year since it was acquired by Puffin, and Sunset Coast's reported net income for 2014 was $200,000.
Required
a. Compute Puffin's 2014 equity method income accrual.
b. Compute the balance in the Investment in Sunset Coast account at December 31, 2014, after all equity method entries have been booked.
c. Prepare the working paper eliminating entries needed in consolidation at December 31, 2014.
d. If Puffin reports $600,000 income from its own operations in 2014, what is consolidated net income for 2014? Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...