\fQuestion 3 Required: Prepare a consolidated balance sheet for the acquisition date, using the parent company extension theory. Question 4 Required: Prepare a consolidated income statement for the year ended Dec 31, 2018, and a RIB statement as of Dec 3i, 2018, using the parent company extension theory. Answers to Questions 3 and 4 are based on the following information FAAT Inc. purchased 70% of 20,000 outstanding voting shares of HF P Inc. for $616,000 cash on Jan 1, 2018. On that day, the market price for HFP's shares is $18.4. Both parties agreed that the equipment had a remaining useful life of 5 years from the date of acquisition. l-IFP's bank loan will mature on January 1, 2023. The balance sheets of both companies right before the acquisition date, as well as I-[FP's fair market values on the acquisition date, are below: FAAT Inc. l-[FP Inc. Fair Value Cash $1,450,000 $315,000 $315,000 Accounts Receivable $100,000 $ 85,000 $ 85,000 Inventory 8 60,000 $45,000 $ 40,000 Equipment 3 80,000 $ 95,000 5 90,000 Accumulated amortization (30,000) (15,000) Land $105,000 $188,000 Goodwill 40 000 5 10,000 Total Assets $1,700,000 $640,000 Current Liabilities $100,000 $280,000 $280,000 Bank loan $260,000 $ 80,000 $ 70,000 Common Shares $800,000 $210,000 Retained Earnings 540,000 5 70,000 Total Liabilities and Equity $1,700,000 $640,000