On January 1, 2016 Venti Corporation exchanged $344,000 cash fora 90% interest in Krunk Corporation’s outstanding voting stock.Krunk’s acquisition balance sheet is in the accompanying Excelspreadsheet along with the financial statements for both companiesfor the year ended December 31, 2018.

On January 1, 2016, Venti prepared the following fair valueallocation schedule:

                        Considerationtransferred by Venti.............................................344,000

                        10%noncontrolling interest fairvalue.......................................   36,000

                        Fairvalue ofKrunk.....................................................................380,000

                        Bookvalue ofKrunk...................................................................324,000

                        Excessfair value over bookvalue................................................ 56,000

                          Allocatedto equipment (remaining life=9years)....................   18,000

                          Allocatedtogoodwill................................................................   38,000

Required:

1. Prepare a schedule showing the allocation of the goodwill tothe controlling and noncontrolling interest.
2. Prepare a schedule showing the Venti’s Equity in Krunk’sEarnings for 2016, 2017, and 2018.
3. Prepare a schedule showing how Venti determined the $488,900balance in the Investment in Krunk account.

Krunk
Balance Sheet
As of January 1, 2016
Cash and receivables	15,000
Inventory	35,000
Property and equipment (net)	350,000
   TOTAL	400,000
Liabilities	76,000
Common stock	150,000
Retained earnings	174,000
   TOTAL	400,000
Financial Statements
December 31, 2018
	Venti		Krunk
Sales	862,000		366,000
Cost of goods sold	515,000		209,000
Depreciation expense	191,200		67,000
Equity in Krunk's earnings	79,200		0
  Separate company net income	235,000		90,000
Retained earnings, 1/1	500,000		278,000
Net income	235,000		90,000
Dividends	130,000		27,000
  Retained earnings, 12/31	605,000		341,000
Cash and receivables	135,000		82,000
Inventory	255,000		136,000
Investment in Krunk	488,900		0
Property and equipment (net)	964,000		328,000
  Total assets	1,842,900		546,000
Liabilities	722,900		55,000
Common stock - Venti	515,000		0
Common stock - Krunk	0		150,000
Retained earnings, 12/31	605,000		341,000
  Total liabilities and equity	1,842,900		546,000