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You are to complete the worksheet below to consolidated the financial statements of the parent and subsidiary at 12/31/2018. Pig purchased Sig on 1/1/2018. On January 1, 2018, Pig Corp. paid $765,000 to purchase 100% of the common stock of Sig Company. On the date Pig acquired Sig (1/1/2018), the book value of Sig was $600,000. (Sig's Common Stock was $400,000, and Retained Earnings was $200,000 on the date of acquisition.) On date of the acquisition Sig's Land was undervalued $30,000; Equipment (5 year life) was overvalued $20,000; Buildings (20 year life) were undervalued $80,000; and Patents (3 year life) were undervalued $36,000. Part 1: Identify the component parts of the cost of the investment on the date of acquisition. Show your computations. Part II: Show any analysis that would be helpful to update the account balances from the date of acquisition to the consolidation date. Part III: Complete the consolidation worksheet. Enter the necessary 12/31/2018 consolidation entries. Label your entries (S,A,I,D,E) in narrow column beside entries. Enter formulas in the consolidation total column to complete the worksheet. 12/31/2018 Pig Company 12/31/2018 Sig Company Consolidation Entries Consolidated 12/31/2018 Debit Credit Income Statement Revenues (800,000) (450,000) Cost of Goods Sold 360,000 210,000 Depreciation Expense 100,000 40,000 Amortization Expense Operating Expenses 60,000 50,000 Equity in Net Income of Sig (138,000) Net Income (418,000) (150,000) Statement of Retained Earnings Retained Earnings 1/1 (838,000) (200,000) Net Income (above) (418,000) (150,000) Dividends Declared 120,000 80,000 Retained Earnings 12/31 (1,136,000) (270,000) Balance Sheet Current Assets 545,000 400,000 Investment in Sig 823,000 Patents 108,000 Land 320,000 80,000 Buildings-net 600,000 400,000 Equipment-net 340,000 230,000 Goodwill Total Assets 2,736,000 1,110,000 Current Liabilities (200,000) (240,000) Long-term Liabilities (400,000) (200,000) Common Stock (1,000,000) (400,000) Retained Earnings-above (1,136,000) (270,000) Total Liabilities & Equities (2,736,000) (1,110,000)

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