Data for PlanetTwo Communications and its wholly-owned subsidiary, Stage 4 Networks, are given below. PlanetTwo acquired Stage 4 on January 1, 2013. PlanetTwo uses the complete equity method to report its investment in Stage 4, and its accounting year ends December 31.

(in thousands)
Acquisition cost	$25,000
Stage 4’s shareholders’ equity, January 1, 2013	5,000
Stage 4’s total reported net income, 2013–2020	10,000
Stage 4’s total dividends paid, 2013–2020	3,000
Stage 4’s reported net income, 2021	600
Dividends declared and paid by Stage 4, 2021	100
Allocation of excess of cost over book value to identifiable net assets, at acquisition date:
Land	(400)
Buildings (20-year life, straight-line)	(1,000)
Identifiable intangibles (5-year life)	4,000
Long-term debt discount (10 years to maturity as of January 1, 2013	200
Goodwill impairment loss, 2013–2020	300
Goodwill impairment loss, 2021	60

Required

a. Calculate the original goodwill reported for this acquisition.

$Answer (in thousands)

b. Calculate the equity in net income for 2021, reported on PlanetTwo’s books, using the complete equity method.

$Answer (in thousands)

c. Calculate the balance in Investment in Stage 4 Networks at December 31, 2021, reported on PlanetTwo’s books.

$Answer (in thousands)

d. Prepare the eliminating entries necessary to consolidate the financial statements of PlanetTwo and Stage 4 for 2021.

Enter answers in thousands.

Ref.	Description		Debit	Credit
(C)	AnswerEquity in net income of Stage 4Dividends - Stage 4Shareholders' equity - Stage 4Investment in Stage 4		Answer	Answer
	AnswerEquity in net income of Stage 4Dividends - Stage 4Shareholders' equity - Stage 4Investment in Stage 4		Answer	Answer
	Investment in Stage 4		Answer	Answer
(E)	AnswerEquity in net income of Stage 4Dividends - Stage 4Shareholders' equity - Stage 4Investment in Stage 4		Answer	Answer
	AnswerEquity in net income of Stage 4Dividends - Stage 4Shareholders' equity - Stage 4Investment in Stage 4		Answer	Answer
(R)	AnswerBuildings,netLandLong-term debt		Answer	Answer
	AnswerBuildings,netGoodwillLand		Answer	Answer
	AnswerGoodwillLandLong-term debt		Answer	Answer
	AnswerBuildings,netDepreciation expenseGoodwill		Answer	Answer
	Investment in Stage 4		Answer	Answer
(O)	AnswerGoodwillInterest expenseLong-term debt		Answer	Answer
	AnswerBuildings, netDepreciation expenseGoodwill		Answer	Answer
	AnswerDepreciation expenseGoodwillGoodwill impairment loss		Answer	Answer
	AnswerGoodwill impairment lossInterest expenseLong-term debt		Answer	Answer
	AnswerBuildings, netDepreciation expenseGoodwill impairment loss		Answer	Answer
	AnswerGoodwillGoodwill impairment lossInterest expense		Answer	Answer