$On$ January $3,2022,$ Persoff Corporation acquired all $of$ the outstanding voting stock $of$ Sea Cliff, Incorporated, $in$ exchange for

$$6,978,000in$ cash. Persoff elected $to$ exercise control over Sea Cliff $as$ a wholly owned subsidiary with $an$ independent accounting

system. Both companies have December $31$ fiscal year$-$ends. $At$ the acquisition date. Sea Cliff's stockholders' equity was $$2,533,000$

including retained earnings $of$ $$1,733,000.$

Persoff pursued the acquisition, $in$ part, $to$ utilize Sea Cliff's technology and computer software. These items had fair values that

differed from their values $on$ Sea Cliff's books $as$ follows:

Sea Cliff's remaining identifiable assets and liabilities had acquisition$-$date book values that closely approximated fair values. Since

acquisition, $no$ assets have been impaired. During the next three years. Sea Cliff reported the following income and dividends:December $31,2024,$ financial statements for each company follow. Parentheses indicate credit balances. Dividends declared were paid $in$ the same period.

$\begin{array}{cc}\text{I}\text{t}\text{e}\text{m}\text{s}& \text{P}\text{e}\text{r}\text{s}\text{o}\text{f}\text{f}\\ \text{S}\text{e}\text{a}\text{C}\text{l}\text{i}\text{f}\text{f}& ?\\ ?& ?\\ ?& \text{I}\text{n}\text{c}\text{o}\text{m}\text{e}\text{S}\text{t}\text{a}\text{t}\text{e}\text{m}\text{e}\text{n}\text{t}\\ ?& ?\\ ?& ?\\ ?& ?\\ \text{R}\text{e}\text{v}\text{e}\text{n}\text{u}\text{e}\text{s}& \text{\$}(2,780,090)\\ \text{\$}(2,280,000)& ?\\ ?& ?\\ ?& \text{C}\text{o}\text{s}\text{t}of\text{g}\text{o}\text{o}\text{d}\text{s}\text{s}\text{o}\text{l}\text{d}\\ 1& 379\\ 490& 881\\ 400& ?\\ \text{D}\text{e}\text{p}\text{r}\text{e}\text{c}\text{i}\text{a}\text{t}\text{i}\text{o}\text{n}\text{e}\text{x}\text{p}\text{e}\text{n}\text{s}\text{e}& 290\\ 000& 392\\ 000& ?\\ ?& \text{A}\text{m}\text{o}\text{r}\text{t}\text{i}\text{z}\text{a}\text{t}\text{i}\text{o}\text{n}\text{e}\text{x}\text{p}\text{e}\text{n}\text{s}\text{e}\\ 388& 000\\ 31& 000\\ ?& ?\\ \text{E}\text{q}\text{u}\text{i}\text{t}\text{y}\text{e}\text{a}\text{r}\text{n}\text{i}\text{n}\text{g}\text{s}in\text{S}\text{e}\text{a}\text{C}\text{l}\text{i}\text{f}\text{f}& 485,690\\ 9& ?\\ ?& ?\\ ?& \text{N}\text{e}\text{t}\text{i}\text{n}\text{c}\text{o}\text{m}\text{e}\\ \text{\$}(1,208,206)& \text{\$}(975,600)\\ ?& ?\\ ?& ?\\ \text{S}\text{t}\text{a}\text{t}\text{e}\text{m}\text{e}\text{n}\text{t}of\text{R}\text{e}\text{t}\text{a}\text{i}\text{n}\text{e}\text{d}\text{E}\text{a}\text{r}\text{n}\text{i}\text{n}\text{g}\text{s}& ?\\ ?& ?\\ ?& ?\\ ?& \text{R}\text{e}\text{t}\text{a}\text{i}\text{n}\text{e}\text{d}\text{e}\text{a}\text{r}\text{n}\text{i}\text{n}\text{g}\text{s}\frac{1}{1}\\ \text{\$}(7,509,090)& \text{\$}(3,274,200)\\ ?& ?\\ ?& ?\\ \text{N}\text{e}\text{t}\text{i}\text{n}\text{c}\text{o}\text{m}\text{e}(above)& 1,208,200\\ 975,600& ?\\ ?& ?\\ ?& \text{D}\text{i}\text{v}\text{i}\text{d}\text{e}\text{n}\text{d}\text{s}\text{d}\text{e}\text{c}\text{l}\text{a}\text{r}\text{e}\text{d}\\ 600& 000\\ 150& 000\\ ?& ?\\ \text{R}\text{e}\text{t}\text{a}\text{i}\text{n}\text{e}\text{d}\text{e}\text{a}\text{r}\text{n}\text{i}\text{n}\text{g}\text{s}\frac{12}{31}& \text{\$}(8,108,20)\\ \text{\$}(4,099,800)& ?\\ ?& ?\\ ?& \text{B}\text{a}\text{l}\text{a}\text{n}\text{c}\text{e}\text{S}\text{h}\text{e}\text{e}\text{t}\\ ?& ?\\ ?& ?\\ ?& ?\\ \text{C}\text{u}\text{r}\text{r}\text{e}\text{n}\text{t}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}& \text{\$}517\\ 000& \text{\$}390\\ 000& ?\\ ?& \text{I}\text{n}\text{v}\text{e}\text{s}\text{t}\text{m}\text{e}\text{n}\text{t}in\text{S}\text{e}\text{a}\text{C}\text{l}\text{i}\text{f}\text{f}\\ 7& 874\\ 890& 9\\ ?& ?\\ \text{C}\text{o}\text{m}\text{p}\text{u}\text{t}\text{e}\text{r}\text{s}\text{o}\text{f}\text{t}\text{w}\text{a}\text{r}\text{e}& 330\\ 090& 54\\ 900& ?\\ ?& \text{P}\text{a}\text{t}\text{e}\text{n}\text{t}\text{e}\text{d}technology\\ 836& 090\\ 92& 000\\ ?& ?\\ \text{G}\text{o}\text{o}\text{d}\text{w}\text{i}\text{l}\text{l}& 112\\ 000& 9\\ ?& ?\\ ?& \text{E}\text{q}\text{u}\text{i}\text{p}\text{m}\text{e}\text{n}\text{t}\\ 1& 856\\ 090& 4\\ 560& 000\\ \text{T}\text{o}\text{t}\text{a}\text{l}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}& \text{\$}11\\ 525& 800\\ \text{\$}5& 096\\ 000& \text{L}\text{i}\text{a}\text{b}\text{i}\text{l}\text{i}\text{t}\text{i}\text{e}\text{s}\\ \text{\$}(1,417,690)& \text{\$}(196,200)\\ ?& ?\\ ?& ?\\ \text{C}\text{o}\text{m}\text{m}\text{o}\text{n}\text{s}\text{t}\text{o}\text{c}\text{k}& 2,000,000\\ 800,000& ?\\ ?& ?\\ ?& \text{R}\text{e}\text{t}\text{a}\text{i}\text{n}\text{e}\text{d}\text{e}\text{a}\text{r}\text{n}\text{i}\text{n}\text{g}\text{s}\frac{12}{31}\\ 8,108,200& 4,099,800\\ ?& ?\\ ?& ?\\ \text{T}\text{o}\text{t}\text{a}\text{l}\text{l}\text{i}\text{a}\text{b}\text{i}\text{l}\text{i}\text{t}\text{i}\text{e}\text{s}\text{a}\text{n}\text{d}\text{e}\text{q}\text{u}\text{i}\text{t}\text{y}& \text{\$}(11,525,800)\\ \text{\$}(5,096,000)& ?\\ ?& ?\\ ?& \text{R}\text{e}\text{q}\text{u}\text{l}\text{r}\text{e}\text{d}\text{:}\\ ?& ?\\ ?& ?\\ ?& ?\end{array}$

$a.$ Determine the fair value $in$ excess $of$ book value for Persoff's acquisition date investment $in$ Sea Cliff.

$b.$ Determine Persoff's Equity earnings $in$ Sea Cliff's balance for the year ended December $31,2024.$

$c.$ Determine Persoff's December $31,2024,$ Investment $in$ Sea Cliff's balance.

$d.$ Prepare a worksheet $to$ determine the consolidated values $tobe$ reported $on$ Persoff's financial statements. $On$ January $3,2022,$ Persoff Corporation acquired all $of$ the outstanding voting stock $of$ Sea Cliff, Incorporated, $in$ exchange for

$$6,978,000in$ cash. Persoff elected $to$ exercise control over Sea Cliff $as$ a wholly owned subsidiary with $an$ independent accounting

system. Both companies have December $31$ fiscal year$-$ends. $At$ the acquisition date. Sea Cliff's stockholders' equity was $$2,533,000$

including retained earnings $of$ $$1,733,000.$

Persoff pursued the acquisition, $in$ part, $to$ utilize Sea Cliff's technology and computer software. These items had fair values that

differed from their values $on$ Sea Cliff's books $as$ follows:

Sea Cliff's remaining identifiable assets and liabilities had acquisition$-$date book values that closely approximated fair values. Since

acquisition, $no$ assets have been impaired. During the next three years. Sea Cliff reported the following income and dividends: