PART C 1- Petra Corporation paid $500,000 for 80% of the outstanding voting common stock of Sizable Corporation on January 2, 2022 when the book value of Sizable's net assets was $460,000. The fair values of Sizable's identifiable net assets were equal to their book values except as indicated below. Book Fair Value Value Inventories (sold in 2022) $80,000 $112,000 Buildings-net (15-year life) 200,000 170,000 Note Payable (paid in 2022) 20,000 21,250 Sizable reported net income of $75,000 during 2022; dividends of $35,000 were declared and paid during the year. (10 Marks) Required: 1. Prepare a schedule to allocate the fair value/book value differential to the specific identifiable assets and liabilities. 2. Determine Petra's income from Sizable for 2022. 3. Determine the correct balance in the Investment in Sizable account as of December 31, 2022. 2- On December 31, 2021, Paladium International purchased 70% of the outstanding common stock of Sennex Chemical. Paladium paid $140,000 for the shares and determined that the fair value of all recorded Sennex assets and liabilities approximated their book values, with the exception of a customer list that was not recorded and had a fair value of $10,000, and an expected remaining useful life of 5 years. At the time of purchase, Sennex had stockholders' equity consisting of capital stock amounting to $20,000 and retained earnings amounting to $80,000. Any remaining excess fair value was attributed to goodwill. The separate financial statements at December 31, 2022 appear in the first two columns of the consolidation workpapers shown below. (10 Marks) Required: Complete the consolidation working papers for Paladium and Sennex for the year 2022. Paladium Sennex Eliminations Consolidated Debit Credit INCOME STATEMENT Sales 331,900 48,000 Income of Sennex 9,100 Cost of Sales (148,000) (25,000) Other Expenses (72,000) ( 8,000) Noncontrolling Interest Share Net income 121,000 15,000 Retained Earnings 1/1 846,000 80,000 Add:Net income 121,000 15,000 Less: Dividends (9,000) (4,000) Retained Earnings 12/31 958,000 91,000 BALANCE SHEET Cash 135,000 64,000 Accounts Receivable-net 227,000 160,000 Inventories 316,000 86,000 Land 80,000 40,000 Equipment and Buildings-net 469,000 230,000 Investment in Sennex 146,300 Customer List Goodwill TOTAL ASSETS 1,373,300 580,000 LIAB. & EQUITY Accounts payable 305,300 469,000 Capital Stock 110,000 20,000 Retained Earnings 958,000 91,000 1/1 Noncontrol. Interest 12/31 Noncontrol. Int. TOTAL LIAB. & EQUITY 1,373,300 580,000 Eliminations C onsolidated Paladium S ennex Debit Credit INCOME STATEMENT Sales 331,900 48,000 Income of Sennex 9,100 Cost of Sales (148,000) ( 25,000) Other Expenses (72,000) ( 8,000) Noncontrolling Interest Share Net income 121,000 15,000 Retained Earnings 1/1 846,000 80,000 Add:Net income 121,000 15,000 Less: Dividends (9,000) (4,000) Retained Earnings 12/31 958,000 91,000 BALANCE SHEET 135,000 64,000 Cash Accounts Receivable-net 227,000 160,000 Invento.

1. PART C
1- Petra Corporation paid $500,000 for 80% of the outstanding voting common stock of Sizable
Corporation on January 2, 2022 when the book value of Sizable's net assets was $460,000. The
fair values of Sizable's identifiable net assets were equal to their book values except as indicated
below.
Book Fair
Value Value
Inventories (sold in 2022) $80,000 $112,000
Buildings-net (15-year life) 200,000 170,000
Note Payable (paid in 2022) 20,000 21,250
Sizable reported net income of $75,000 during 2022; dividends of $35,000 were declared and
paid during the year. (10 Marks)
Required:
1. Prepare a schedule to allocate the fair value/book value differential to the specific identifiable
assets and liabilities.
2. Determine Petra's income from Sizable for 2022.
3. Determine the correct balance in the Investment in Sizable account as of December 31, 2022.
2- On December 31, 2021, Paladium International purchased 70% of the outstanding common
stock of Sennex Chemical. Paladium paid $140,000 for the shares and determined that the fair
value of all recorded Sennex assets and liabilities approximated their book values, with the
exception of a customer list that was not recorded and had a fair value of $10,000, and an
expected remaining useful life of 5 years. At the time of purchase, Sennex had stockholders'
equity consisting of capital stock amounting to $20,000 and retained earnings amounting to
$80,000. Any remaining excess fair value was attributed to goodwill. The separate financial
statements at December 31, 2022 appear in the first two columns of the consolidation
workpapers shown below. (10 Marks)
Required:
Complete the consolidation working papers for Paladium and Sennex for the year 2022.
Paladium

2. Sennex
Eliminations
Consolidated
Debit
Credit
INCOME STATEMENT Sales
331,900
48,000
Income of Sennex
9,100
Cost of Sales
(148,000)
(25,000)
Other Expenses
(72,000)
( 8,000)
Noncontrolling Interest Share
Net income
121,000
15,000
Retained Earnings 1/1
846,000
80,000

3. Add:Net income
121,000
15,000
Less: Dividends
(9,000)
(4,000)
Retained Earnings 12/31
958,000
91,000
BALANCE SHEET
Cash
135,000
64,000
Accounts Receivable-net
227,000
160,000
Inventories
316,000
86,000
Land
80,000
40,000
Equipment and Buildings-net

4. 469,000
230,000
Investment in Sennex
146,300
Customer List
Goodwill
TOTAL ASSETS
1,373,300
580,000
LIAB. & EQUITY Accounts payable
305,300
469,000
Capital
Stock
110,000
20,000
Retained Earnings
958,000
91,000
1/1 Noncontrol.
Interest
12/31 Noncontrol. Int.
TOTAL LIAB. & EQUITY

5. 1,373,300
580,000
Paladium Sennex
Eliminations Consolidated
Debit Credit
INCOME STATEMENT Sales 331,900 48,000
Income of Sennex 9,100
Cost of Sales (148,000) (25,000)
Other Expenses (72,000) ( 8,000)
Noncontrolling Interest Share
Net income 121,000 15,000
Retained Earnings 1/1 846,000 80,000
Add:Net income 121,000 15,000
Less: Dividends (9,000) (4,000)
Retained Earnings 12/31 958,000 91,000
BALANCE SHEET
Cash
135,000 64,000
Accounts Receivable-net 227,000 160,000
Inventories 316,000 86,000
Land 80,000 40,000
Equipment and Buildings-net 469,000 230,000
Investment in Sennex 146,300
Customer List
Goodwill
TOTAL ASSETS 1,373,300580,000
LIAB. & EQUITY Accounts payable305,300 469,000
Capital
Stock
110,000 20,000
Retained Earnings 958,000 91,000
1/1 Noncontrol.
Interest
12/31 Noncontrol. Int.
TOTAL LIAB. & EQUITY 1,373,300580,000