On Jan. $1,2024,$ Paldea's Real Estate acquired $60\%$ of Scarlet Inc. for $$150,000$ of no par value common stock. At this time, Scarlet's assets and liabilities were assessed for fair value and found to have the following balances $($note$,$ these amounts are also in the excel file$)$:

The following bullet points are relevant to the year $2024$:

Scarlet reported $$35,000$ of net income

Scarlet declared and paid $$15,000$ of dividends

Scarlet uses FIFO, so all of its inventory turned over during the year.

The PPE with a fair value differential has an estimated useful life of $25$ years from acquisition date.

The "Intangible Assets" listed on Scarlet's balance sheet are NOT amortized and were NOT impaired.

Goodwill from the acquisition of Scarlet was impaired by $$2,000$

During the year, Scarlet sold inventory to Paldea for $$105,000.$ This inventory had an original cost to Scarlet of $$73,500.$ Paldea resold $80\%$ of this inventory to non$-$affiliates during the year.

On Dec. $31,2024,$ Paldea still owed Scarlet $$25,000$ for the inventory purchased. This is held as an account payable by Paldea and an account Receivable by Scarlet.

Required:

a$)$ On the first worksheet labelled "Acquisition Date" of the attached excel file, give Paldea's Journal Entry to record the acquisition of Scarlet's stock.

b$)$ On the first worksheet labelled "Acquisition Date" of the attached excel file, calculate any relevant differences between Scarlet's fair value and book value. Also fill in the fair value differential $($including goodwill if any$)$ on this date and calculate the allocation of the differential between between Paldea and Scarlet's NCI in cells J$14$ and J$15.$

c$)$ On the first worksheet labelled "Acquisition Date" of the attached excel file, complete the acquisition date consolidation worksheet. Also give any consolidation entries below the worksheet. Note, there were no existing intercompany payables$/$receivables on Jan. $1,2024.$

d$)$ On the second worksheet labelled "End of year $1"$ of the attached excel file, give the Dec. $31,2024$ Differential for Scarlet, allocate the differential between Paldea and Scarlet's NCI, and give any JE's Paldea needs to record for $2024$ in regards to its investment in Scarlet.

e$)$ On the second worksheet labelled "End of year $1"$ of the attached excel file, complete the Dec. $31,2024$ consolidation worksheet. Also give any consolidation entries below the worksheet.

Adjustments

Eliminate Scarlet's Acc. Dep.

D$.$

C$.$

Eliminate Intercompany Receivables$/$Payables

Eliminate Scarlet's Equity

Balance Sheet Differential Adiustment

Income Statement Differential Adiustment

Income Statement Differential Adiustment

e$)$ Dec. $31,2024$ Consolidation

As of Dec. $31,2024($end of first period after acquisition$)$

d$)$ Paldea's Journal Entries

Income

Acquisition Date Differential

Dividends

Adjustment of change in differential

Dec. $31,2024$ Differential

Adjustment deferring intercompany profits

c$)$ Consolidation

Consolidation Adjustments

Eliminate Scarlet's Acquisition Date A Dr$.$ Cl$.$

Eliminate Scarlet's Equity

Adiust the Balance Sheet for the Differential

a$)$ Paldea's JEs

b$)$ Differential