Please help me with this question with a detailed answer, which shows calculation and explanation. Thank you very much for your help.

Question:

The balance sheets of Wellington Ltd. and Richmond Ltd. on December 30, 2020 were as follows.

WellingtonRichmond Ltd Fair Value

Cash and receivables$96,000 $25,000$22,000

Inventory87,000 40,00035,000

Plant assets (net)198,000 75,00090,000

Intangible assets24,000 10,0007,500

$405,000 $150,000

Current liabilities$73,000 $30,000$35,000

Long-term debt87,500 60,000 57,000

Common Stock 135,000 100,000

Retained Earnings (Deficit) 109,500 (40,000)

$405,000 $150,000

On December 31, 2019, Wellington issued 2,500 shares, with a fair market value (FMV) of $25.00 each, plus $8,000 long-term debt for all of the outstanding shares of Richmond Ltd.

Costs involved in the acquisition, paid in cash, were as follows.

Costs of arranging the acquisition (legal costs)$3,500

Costs of issuing shares 1,500

$5,000

Wellington Ltd. was identified as the acquirer in the combination.

REQUIRED:

a)Calculate and allocate the Acquisition Differential to determine the value of goodwill to be recorded on the consolidated Balance Sheet.Use the entity theory for calculations.

Note:No need to prepare a Consolidated Balance Sheet.

b)What is the $ amount to be reported on the Consolidated Balance Sheet for:

i.Common Shares

ii.Retained Earnings

iii.Long term Debt