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Fox Corporation acquired 100 percent ownership of Lamb Products on January 1, 2018.

for $200,000. On that date, Lamb reported retained earnings of $50,000 and had $10,000 of common stock outstanding and $90,000 of Paid in Capital

Fox has used the equity method of accounting for its investment in Lamb.

On the date of the business combination, the fair value of Lamb's depreciable assets

were $20,000 more than book value. The differential assigned to depreciable

assets is amortized over 10 years. In addition, notes payable is overvalued by $15,000 and has

a remaining life of 5 years. Any remaining acquisition differential is assigned to goodwill, which is

not impaired at December 31, 2018.

There was $10,000 of intercompany receivables/payables as of 12/31/18

Required: Carefully Follow and label each step.

1. Prepare the acquisition analysis as of acquisition date. Compute the

unamortized differential as of 1/1/2018 and the amortization for 2018

2. Verify the calculation of the balance in the acccount equity in sub

earnings and record the parent company entries with respect to its equity

investment in sub

3. Calculate Net Income Allocated to the Controlling Interest (also known as consolidated net income)

4. Prepare all elimination entries for 2018

5. Complete the consolidating spreadsheet for the year ended 2018.

There was $10,000 of intercompany receivables/payables as of 12/31/18

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