Please see the attach file
5 Corp A acquired 80% of the outstanding $10 par voting stock of Comp T on January 1, 2020 in exchange for 50,000 shares of its $10 par common stock with a market price of $15 per share. Both companies continued to operate as separate business entities maintaining separate accounting records with years ending December 31. Additional information for 2020 follows: • There were no changes in the common stock and additional paid-in capital accounts during 2020 except the one necessitated by Comp A’s acquisition of Comp T. • At acquisition date the current value of Comp T’s machinery exceeded its book value by $54,000. The excess will be amortized over the estimated average remaining life of 6 years. The fair value of other assets and liabilities were equal to their book values. • An impairment test at the end of the year indicated that goodwill had lost $3,000 of its value. • On July 1, 2020, Comp A sold a building, including land, to Comp T for $129,000 cash. At the date of sale, the book value of land was $33,000 and building was $66,000. Comp T allocated the $129,000 purchase price to the land for $43,000 and to the building for $86,000. Comp T depreciated the building over its estimated 5 year remaining useful life by the straight-line method with no salvage value. • During 2020 Comp A purchased merchandise from Comp T at an aggregate invoice price of $180,000, which included a 100% markup on Comp T’s cost. At December 31, 2020, Comp A owed Comp T $75,000 on these purchases, and $36,000 of the merchandise purchased remained in Comp A’s inventory. Trial balance at December 31, 2020 for both companies follows: Comp AComp T Cash$ 285,000$ 150,000 Accounts receivable430,000350,000 Inventory530,000410,000 Property & equipment660,000680,000 Accumulated depreciation(185,000)(210,000) Investment in Comp T750,000– Accounts payable670,000594,000 Common stock ($10 par)1,200,000400,000 Additional paid-in capital140,00080,000 Retained earnings (1/1/2019)220,000156,000 Dividends paid–(40,000) Net sales1,900,0001,500,000 Dividend income from Comp T40,000– Gain on sale of building30,000– Cost of goods sold1,180,000870,000 Operating expenses550,000440,000 Required: 1. Calculate the amount of goodwill, if any, at acquisition date. 2. Record the eliminating entries regarding capital accounts. 3. Record the required adjustments entries concerning depreciation and/or amortization of excess value, if any. 4. Record the eliminating entries regarding intercompany transactions. 5. Complete the consolidation worksheet to prepare consolidated financial statements for the year ended December 31, 2020. Hint: Use an Excel Worksheet for registering the transactions.