A. Prepare a Computation and Allocation Schedule for the difference between book value of equity acquired and the value implied by the purchase price. B. Present the eliminating/adjusting entries needed on the consolidated worksheet for the year ended December 31, 2018. (It is not necessary to prepare the worksheet.) 1. Assume the use of the cost method. 2. Assume the use of the partial equity method. 3. Assume the use of the complete equity method. C. Present the eliminating/adjusting entries needed on the consolidated worksheet for the year ended December 31, 2019. (It is not necessary to prepare the worksheet.) 1. Assume the use of the cost method. 2. Assume the use of the partial equity method. 3. Assume the use of the complete equity method. Use the following financial data for 2020 for requirements D through G. \begin{tabular}{|c|c|c|} \hline & Porter company & salem company \\ \hline Sales & $1,100,000 & $450,000 \\ \hline Dividend income & 48,000 & -- \\ \hline Total revenue & 1,148,000 & 450,000 \\ \hline Cost of goods sold & 900,000 & 200,000 \\ \hline Depreciation expense & 40,000 & 30,000 \\ \hline Other expenses & 60,000 & 50,000 \\ \hline Total cost and expense & 1,000,000 & 280,000 \\ \hline Net income & $148,000 & $170,000 \\ \hline 1/1 Retained earnings & $500,000 & $230,000 \\ \hline Net income & 148,000 & 170,000 \\ \hline Dividends declared & (90,000) & (60,000) \\ \hline 12/31 Retained earnings & $558,000 & $340,000 \\ \hline Cash & $70,000 & $65,000 \\ \hline Accounts receivable & 260,000 & 190,000 \\ \hline Inventory & 240,000 & 175,000 \\ \hline Investment in Salem Company & 850,000 & \\ \hline Land & O & 320,000 \\ \hline Plant and equipment & 360,000 & 280,000 \\ \hline Total assets & $1,780,000 & $1,030,000 \\ \hline Accounts payable & $132,000 & $110,000 \\ \hline Notes payable & 90,000 & 30,000 \\ \hline Capital stock & 1,000,000 & 550,000 \\ \hline Retained earnings & 558,000 & 340,000 \\ \hline Total liabilities and equity & $1,780,000 & $1,030,000 \\ \hline \end{tabular} On January 1, 2018, Porter Company purchased an 80% interest in the capital stock of Salem Company for $850,000. At that time, Salem Company had capital stock of $550,000 and retained earnings of $80,000. Differences between the fair value and the book value of the identifiable assets of Salem Company were as follows: The book values of all other assets and liabilities of Salem Company were equal to their fair values on January 1, 2018. The equipment had a remaining life of five years on January 1, 2018. The inventory was sold in 2018. Salem Company's net income and dividends declared in 2018 and 2019 were as follows: Year 2018 Net Income of \$100,000; Dividends Declared of \$25,000 Year 2019 Net Income of \$110,0oo; Dividends Declared of \$35, ooo D. Prepare a consolidated financial statements workpaper for the year ended December 31, 2020. Although no goodwill impairment was reflected at the end of 2018 or 2019, the goodwill impairment test conducted at December 31,2020 revealed implied goodwill from Salem to be only $150,000. The impairment has not been recorded in the books of the parent. (Hint: You can infer the method being used by the parent from the information in its trial balance.) E. Prepare a consolidated statement of financial position and a consolidated income statement for the year ended December 31, 2020. F. Describe the effect on the consolidated balances if Salem Company uses the LIFO cost flow assumption in pricing its inventory and there has been no decrease in ending inventory quantities since 2018. G. Prepare an analytical calculation of consolidated retained earnings for the year ended December 31, 2020. A. Prepare a Computation and Allocation Schedule for the difference between book value of equity acquired and the value implied by the purchase price. B. Present the eliminating/adjusting entries needed on the consolidated worksheet for the year ended December 31, 2018. (It is not necessary to prepare the worksheet.) 1. Assume the use of the cost method. 2. Assume the use of the partial equity method. 3. Assume the use of the complete equity method. C. Present the eliminating/adjusting entries needed on the consolidated worksheet for the year ended December 31, 2019. (It is not necessary to prepare the worksheet.) 1. Assume the use of the cost method. 2. Assume the use of the partial equity method. 3. Assume the use of the complete equity method. Use the following financial data for 2020 for requirements D through G. \begin{tabular}{|c|c|c|} \hline & Porter company & salem company \\ \hline Sales & $1,100,000 & $450,000 \\ \hline Dividend income & 48,000 & -- \\ \hline Total revenue & 1,148,000 & 450,000 \\ \hline Cost of goods sold & 900,000 & 200,000 \\ \hline Depreciation expense & 40,000 & 30,000 \\ \hline Other expenses & 60,000 & 50,000 \\ \hline Total cost and expense & 1,000,000 & 280,000 \\ \hline Net income & $148,000 & $170,000 \\ \hline 1/1 Retained earnings & $500,000 & $230,000 \\ \hline Net income & 148,000 & 170,000 \\ \hline Dividends declared & (90,000) & (60,000) \\ \hline 12/31 Retained earnings & $558,000 & $340,000 \\ \hline Cash & $70,000 & $65,000 \\ \hline Accounts receivable & 260,000 & 190,000 \\ \hline Inventory & 240,000 & 175,000 \\ \hline Investment in Salem Company & 850,000 & \\ \hline Land & O & 320,000 \\ \hline Plant and equipment & 360,000 & 280,000 \\ \hline Total assets & $1,780,000 & $1,030,000 \\ \hline Accounts payable & $132,000 & $110,000 \\ \hline Notes payable & 90,000 & 30,000 \\ \hline Capital stock & 1,000,000 & 550,000 \\ \hline Retained earnings & 558,000 & 340,000 \\ \hline Total liabilities and equity & $1,780,000 & $1,030,000 \\ \hline \end{tabular} On January 1, 2018, Porter Company purchased an 80% interest in the capital stock of Salem Company for $850,000. At that time, Salem Company had capital stock of $550,000 and retained earnings of $80,000. Differences between the fair value and the book value of the identifiable assets of Salem Company were as follows: The book values of all other assets and liabilities of Salem Company were equal to their fair values on January 1, 2018. The equipment had a remaining life of five years on January 1, 2018. The inventory was sold in 2018. Salem Company's net income and dividends declared in 2018 and 2019 were as follows: Year 2018 Net Income of \$100,000; Dividends Declared of \$25,000 Year 2019 Net Income of \$110,0oo; Dividends Declared of \$35, ooo D. Prepare a consolidated financial statements workpaper for the year ended December 31, 2020. Although no goodwill impairment was reflected at the end of 2018 or 2019, the goodwill impairment test conducted at December 31,2020 revealed implied goodwill from Salem to be only $150,000. The impairment has not been recorded in the books of the parent. (Hint: You can infer the method being used by the parent from the information in its trial balance.) E. Prepare a consolidated statement of financial position and a consolidated income statement for the year ended December 31, 2020. F. Describe the effect on the consolidated balances if Salem Company uses the LIFO cost flow assumption in pricing its inventory and there has been no decrease in ending inventory quantities since 2018. G. Prepare an analytical calculation of consolidated retained earnings for the year ended December 31, 2020