Situation:

On January $1,20$X$2,$ Porpoise Corp. acquired $65\%$ of the common shares of Salamander Co$.$ for

$$1,300,000.$ At that date, Salamander's assets and liabilities had the following book values and

fair values:

Salamander Co$.$

Statement of financial position

As At January $1,20$X$2$

As of January $1,20$X$2,$ the equipment had a remaining useful life of eight years. Inventory on

hand on January $1,20$X$2,$ was all sold by December $31,20$X$2.$ The bonds payable mature on

December $31,20$ X $6.$

Porpoise uses the cost method to account for its investment in Salamander. The companies' statements of financial position at December $31,20$X$4,$ and statements of comprehensive income for the year ended December $31,20$X$4,$ are as follows:

Statements of financial position

As at December $31,20$X$4$

$\backslash$table$[[,$Porpoise$],[$Salamander$,],[,],[,$Cash$],[$$ $350,000],[$$ $140,000],[,],[$Accounts receivable,$550],[000,360],[000,],[,$Inventory$],[1,000],[000,400],[000,],[$Equipment $-$ net,$1],[650,000],[1,500],[000,$Investment in Salamander$],[1,300],[000,-],[,],[,$$$4],[850,000],[$$$2,400],[000,$Accounts payable$],[$$$550,000],[$$$200,000],[,],[$Bonds payable,$700],[000,400],[000,],[,$Common shares$],[1,250],[000,500],[000,],[$Retained earnings,$2],[350,000],[1,300],[000,],[$$$4,850],[000,$$$2],[400,000]]$

Statement of Comprehensive Income

For the year ended December $31,20$X$4$

$\backslash$table$[[,$Porpoise$],[$Salamander$,],[,],[,$Sales$],[$$$5,000],[000,$$$3],[000,000],[$Cost of goods sold,$3],[500,000],[2,400],[000,$Gross profit$],[1,500],[000,600],[000,],[$Selling and administrative,$600],[000,350],[000,],[,$expenses$],[,],[,],[,],[$Depreciation expense,$120],[000,75],[000,],[,$Interest expense$],[60,000],[25,000],[,],[$Income before income taxes,$720],[000,150],[000,],[,$Income taxes$],[248,000],[60,000],[,],[$Net income and,$$472],[000,$$$90],[000,],[,$comprehensive income$],[,],[,],[,]]$ Additional information:

$1.$ During $20$X$3$ and $20$X$4,$ Salamander sold inventory to Porpoise with a $\backslash (20\backslash \%\backslash )$ gross profit as follows:

$2.$ During $20$X$4,$ Porpoise sold inventory to Salamander with a $\backslash (30\backslash \%\backslash )$ gross profit as follows: Intercompany sales $-$ downstream sale of $\backslash (\backslash$$ $160,000\backslash )$

Goods remaining in Salamander's inventory at December $31-\backslash (\backslash$$ $160,000\backslash )$

$3.$ Management has determined that Salamander is a cash$-$generating unit $($CGU$).$ Porpoise tests its investment in Salamander each year for impairment and allocates the loss, if any, first to goodwill. Goodwill was impaired by $\backslash (\backslash$$ $20,000\backslash )$ and $\backslash (\backslash$$ $30,000\backslash )$ for fiscal years $20$ X $3$ and $20$X$4,$ respectively.

$4.$ On July $1,20$X$3,$ Salamander sold Porpoise equipment with a net book value of $\backslash (\backslash$$ $70,000\backslash )$ for a cash consideration of $\backslash (\backslash$$ $40,000\backslash ).$ The equipment originally cost Salamander $\backslash (\backslash$$ $90,000\backslash ).$ It had a remaining useful life of six years at the date of the intercompany sale. Assume that the loss is not an impairment loss.

$5.$ Neither company paid dividends in $20$X$4.$ The income tax rate has remained at $\backslash (40\backslash \%\backslash )$ for both companies since $20$X$2.$ Ignore future income taxes on the purchase price discrepancy.

$6.$ Porpoise uses the FVE method to value the non$-$controlling interest at the acquisition date. Required:

a$)$ i$.$ Prepare a schedule showing the calculation of goodwill at Salamander's acquisition date.

ii$.$ Prepare an acquisition differential amortization and impairment $($AD$)$ schedule for the period from January $1,20$X$2,$ to December $31,20$ X $4.$