8 Return to question Problem 3-34 (LO 3-3a, 3-3b, 3-7) Branson paid $607500 cash for all of the outstanding common stock of Woltpack Inc. on January 1 2017 On that date,the subsidiary had a book value of $373,000 (common stock of $200.000 and retained earnings of $173,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $199.000 fair value Any remaining excess fair value was considered goodwill In negotiating the acquisition price. Branson also promised to pay Wolfpack's former owners an additional $45,000 if Wolfpack's income exceeded $150,000 total over the first two years after the acquisition. At the acquisition date, Branson estimated the probability-adjusted present value of this contingent consideration at $31,500 On December 31, 2017, based on Wolfpack's earnings to date, Branson increased the value of the contingency to $36.000. During the subsequent two years, Wolfpack reported the following amounts for income and dividends oints Net Income Dividends Declared 2017 2018 s 8e, see 90,500 5 25,e0e 35,800 agr t, on December 31. 2013, Branson paid the additional $45,000 performance fee to In keeping with the Wolfpack's previous owners. Prepare each of the foliowing: a. Branson's entry to record the acquisition of the shares of its Wolfpack subsidiary 8 to adjust its contingent performance obligation for changes in fair value and the b. Branson's entries at the end of 2017 and 201 December 31, 2018. payment c. Prepare consolidation worksheet entries as of December 31. 2018 assuming that Branson has applied the equity method d. Prepare consolidation worksheet entries as of December 31 2018. assuming that Branson has applied the initial value method 8 Answer is complete but not entirely correct. 8 of 13 Next > Rre, Graw