Please explain each step, and use a similar format for answering each question so its easy to follow. Thank you!

On January 1, Year 4, Cyrus Inc. paid $931,000 in cash to acquire all of the ordinary shares of Kelvin Company On that date, Kelvin's retained earnings were $217,000. All of Kelvin's assets and liabilities had fair values equal to carrying amounts except for an investment in bonds, which was worth $13,204 more than carrying amount and will mature on December 31, Year 8. The recoverable amount for goodwill was $40,000 at the end of Years 4 and 5. In Year 4, Cyrus reported net income from its own operations (exclusive ofany income from Kelvin) of $142,000 and declared no dividends. In Year 4, Kelvin reported net income of $107,000 and paid a $57,000 cash dividend. Cyrus uses the cost method to report its investment in Kelvin and uses the effective interest method to amortize premiums or discounts on investment in bonds The amortization of the acquisition differential pertaining to the investment in bonds was $2,693 in Year 4 and $2,684 in Year 5. The financial statements for Cyrus and Kelvin for the year ended December 31, Year 5, were as follows: Revenues and investment income Expenses Profit Retained earnings, l/l/Year 5 Profit Dividends paid Retained earnings, 12/31/Year 5 Equipment (net) Investment in Kelvin Investment in bonds Receivables and inventory Cash Total assets Ordinary shares Retained earnings Liabilities Total equities and liabilities Cyrus $1,098,000 (010,000) $ 288,000 $ 984,000 230,000 (121,000) $1,151,000 $ 884,000 931,000 0 584,000 213,000 $2,612,000 5 728,000 1,151,000 733,000 $2,612,000 Kelvin $1,014,000 (846,000) $ 168,000 $ 267,000 168,000 (59,000) $ 376,000 $ 452,000 0 336,000 654,000 237,000 $1,679,000 5 620,000 376,000 683,000 $1,679,000 Required: (a) Prepare a schedule of changes to the acquisition differential for Years 4 and 5. (Leave no cells blank - be certain to enter "0" wherever required. Negative/Deductible amounts should be indicated by a minus sign. Omit $ sign in your response.) Balance Balance Jan. 1 Changes Dec. 31 Year 4 Year 4 Year 5 Year 5 Investment in bonds 5 $ $ $ Goodwill S $ $ $ (b) Calculate investment in bonds and goodwill for the consolidated balance sheet at the end of Year 5. (Omit $ sign in your response.) Investment in bonds 5 Goodwill $ (c) Calculate investment income from Kelvin and investment in Kelvin account balances for Cyrus's separate entity financial statements for Year 5, assuming Cyrus uses the: (Omit $ sign in your response.) (i) Cost method Cost Method Investment income from Kelvin $ Investment in Kelvin 5 (ii) Equity method Equity Method Investment income from Kelvin $ Investment in Kelvin $ (d) Whether the parent's method of accounting for its investment in Kelvin affect the amount reported for expenses in its December 31, Year 5, consolidated income statement? 0 Yes (9 No (e) Whether the parent's method of accounting for its investment in Kelvin affect the amount reported for investment in bonds in its December 31, Year 5, consolidated balance sheet? Yes 0 No (f) What is Cyrus's January 1, Year 5, retained earnings account balance on its separate entity financial statements assuming Cyrus accounts for its investment in Kelvin using the: (i) Cost method? (ii) Equity method? (Omit $ sign in your response.) Retained earnings (1) Cost Method $ (ii) Equity Method $ (9) What are consolidated retained earnings at January 1, Year 5, assuming Cyrus accounts for its investment in Kelvin using the: (i) Cost method? (ii) Equity method? (Omit $ sign in your response.) Retained earnings (1) Cost Method $ (ii) Equity Method $