On January $1,2024,$ Parrot Corporation acquired Seeds Company's $300,000$

outstanding common shares, $$10$ par, for $$4,500,000($Total outstanding common

shares $1,000,000).$ At the date of acquisition, Seeds reported common stock

outstanding of $$10,000,000$ and retained earnings of $$10,000,000.$ The book value of

Seeds' net assets approximated market value except for inventory understated

$$120,000$ and patents $($ $$2,000,000$ initially purchased on December $312021,10$ years

economic useful years$)$ understated $$1,000,000.$ The inventory will be used over the

first three months.

At the year end of $2024,$ Stock price of Seeds has increased by $20\%.$

For $2024,$ Some items of Income Statement are reported:

Required:

Calculate Parrot's investment in Seeds at the year end of $2024$ if Parrot can

exercise significant influence over seeds. $(5$ Points$)$

Calculate Parrot's investment in Seeds at the year end of $2024$ if Parrot cannot

exercise significant influence over seeds. $(5$ Points$)$

Prepare all related Journal entries for Parrot and Seeds during $2024.(10$ Points$)$