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Pepsi Co., which is a calendar-year-reporting company, purchased 100% of the common stock of Sprite Co. for $300,000 on 1/1/20. On the acquisition date, the net assets of Sprite approximated their fair values. Each company's financial statements for the year ended 12/31/20 are presented on the Illustration #2c Worksheet which can be found on GauchoSpace under the Chapter 2 Handouts link. Required: a. Present the journal entries made by Pepsi during 2020 to reflect the acquisition of Sprite and the equity method of accounting. b. Complete the Illustration #2c Worksheet" to show the consolidation on 12/31/20. Debit Credit Consolidated Income Statement (2020) Sales Cost of sales Depreciation expense Other expenses Income from Sprite Pepsi Co. (750,000) 230,000 45,000 150,000 (75,000) Sprite Co. (300,000) 175,000 10,000 40,000 Net Income (400,000) (75,000) Statement of Retained Earnings Balances, beginning 1/1/20 Net income Dividends declared Balances, 12/31/20 (225,000) (400,000) 100,000 (525,000) (100,000) (75,000) 20,000 (155,000) 75,000 90,000 80,000 Balance Sheet (as of 12/31/20) Cash Accounts receivable Inventory Investment in Sprite Land Buildings and equipment Accumulated depreciation 180,000 145,000 180,000 355,000 175,000 715,000 (450,000) 130,000 145,000 (20,000) Total Assets 1,300,000 500,000 Payables and accruals Bonds payable Common stock Retained earnings (100,000) (175,000) (500,000) (525,000) (70,000) (75,000) (200,000) (155,000) Total Liab, and Equity (1,300,000) (500,000) Acquisition Journal Entry: Investment Income from S Equity Method Journal Entries

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