PROBLEM ONE - EQUITY METHOD COMBINATION - 40 POINTS Sanjuana Corporation paid $800,000 on January 1, 2021 for a 50% interest in Santurce Inc. On January 1, 2020, the book value of Sand's stockholders' equity consisted of $450,000 of common stock and $440,000 of retained earnings. All the excess purchase cost over book value acquired was attributable: 35% an equipment (overvalue) with an estimated life of 10-years. 15% a building (undervalue) with an estimate life of 15-years. 50% remainder for goodwill Sanjuana Corporation used the equity method. Information of dividends and net income for 2021 of Santurce Inc. it is presented below. June 30, 2021 - dividend Sep 30, 2021 - dividend Dec 31, 2021 - dividend Dec 31, 2021 - net income $20,000 $25,000 $35.000 $900.000 Using the working paper: 1. Present the analysis of combination and prepare the journal entries for acquired investment, received dividends, received net income and amortization of equipment and building 2. Calculate the Sanjuana's income from Santurce Inc. for 2021. 3. Determine the balance of Sanjuana's Investment in Santurce Inc. account on December 31, 2021. 4. Assume that Sanjuana's net income for 2021 consists of $1,000,000 sales and expenses for $712,000 and its investment income from Sand Inc. Prepare the income Statement for Sanjuana Corporation for December 31, 2021