PART C Pat Corporation acquired an 80 percent interest in Sci Corporation for $480,000 on January...

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PART C Pat Corporation acquired an 80 percent interest in Sci Corporation for $480,000 on January 1, 2021, when Sci's stockholders' equity consisted of $400,000 capital stock and $50,000 retained earnings. The excess fair value over book value acquired was assigned to plant assets that were undervalued by$100,000 and to goodwill. The undervalued plant assets had a four-year useful life. Additional Information 1. Pat's account receivable includes $10,000 owed by Sci. 2. Sci mailed its check for $40,000 to Pat on December 30, 2022, in settlement of the advance. 3. A $20,000 dividend was declared by Sci on December 30, 2022, but was not recorded by Pat. 4. Financial statements for Pat and Sci Corporations for 2022 follow (in thousands): Statements of Income and Retained Earnings Pal Sci for the Year Ended December 31 Sales $1,800 $600 Income from Sci 76 Cost of sales (1.200) (300) Operating expenses (380) (180) Net Income 296 120 Add: Retained earnings January 1 244 100 Less: Dividends (200) (40) Retained earnings $340 $180 Balance Sheet at December 31 Cash $12 $30 Accounts receivable-net 52 40 Inventories 164 120 Advance to Sci 40 Other current assets 160 10 Land 320 60 Plant assets net 680 460 Investment in Sci 560 Total assets $1.988 $720 Accounts payable $48 $30 Dividends payable 20 Other liabilities 200 90 Capital stock 1.400 400 Retained earnings 340 180 Total liabilities and stockholders' Equity $1.988 $720 Required: 1) Prepare the elimination entries required for consolidation on December 31, 2022. Show all required computations 2) Prepare the consolidation working papers for Parent and Subsidiary for the year ended December 31, 2022. 3) State which items have been amortized and which have not, and why? [END OF TMA] (30 Marks) PART C Pat Corporation acquired an 80 percent interest in Sci Corporation for $480,000 on January 1, 2021, when Sci's stockholders' equity consisted of $400,000 capital stock and $50,000 retained earnings. The excess fair value over book value acquired was assigned to plant assets that were undervalued by$100,000 and to goodwill. The undervalued plant assets had a four-year useful life. Additional Information 1. Pat's account receivable includes $10,000 owed by Sci. 2. Sci mailed its check for $40,000 to Pat on December 30, 2022, in settlement of the advance. 3. A $20,000 dividend was declared by Sci on December 30, 2022, but was not recorded by Pat. 4. Financial statements for Pat and Sci Corporations for 2022 follow (in thousands): Statements of Income and Retained Earnings Pal Sci for the Year Ended December 31 Sales $1,800 $600 Income from Sci 76 Cost of sales (1.200) (300) Operating expenses (380) (180) Net Income 296 120 Add: Retained earnings January 1 244 100 Less: Dividends (200) (40) Retained earnings $340 $180 Balance Sheet at December 31 Cash $12 $30 Accounts receivable-net 52 40 Inventories 164 120 Advance to Sci 40 Other current assets 160 10 Land 320 60 Plant assets net 680 460 Investment in Sci 560 Total assets $1.988 $720 Accounts payable $48 $30 Dividends payable 20 Other liabilities 200 90 Capital stock 1.400 400 Retained earnings 340 180 Total liabilities and stockholders' Equity $1.988 $720 Required: 1) Prepare the elimination entries required for consolidation on December 31, 2022. Show all required computations 2) Prepare the consolidation working papers for Parent and Subsidiary for the year ended December 31, 2022. 3) State which items have been amortized and which have not, and why? [END OF TMA] (30 Marks)