Question #5 please! On January 2, 2018, Company P acquired all of the outstanding voting stock ofCompany S in exchange for $6,000 in stock. Company P elected to exercise control overCompany S as a wholly owned subsidiary with an independent accounting system. Both companieshave December 31 year ends. At the acquisition date, Company S has a stockholder's equityof $2,500, which includes Retained Earnings of $1,700.Company P pursued the acquisition, in part, to utilize Company S technology and computersoftware. These items had fair values that differed from their values on Company Sbooks as follows as of the acquisition date:AssetPatented technologyComputer softwareBook ValueFair Value$$At December 31 2020, Company S owes Company P $20.Company S remaining identifiable assets and liabilities had acquisiiton-datebook values that closely approximated fair values. Since acquisition, no assets havebeen impaired. During the next three years, Company S reported the following income and dividends:140 $60 $RemainingLife2,2401,2607 years12 years REQUIRED: LABEL EACH STEP1234561.2.3.4.5.2018 $2019 $2020 $6.Net income900 $940 $975 $Dividends150150150Prepare the analysis as of acquisition date including unamortized differential at 1/1/18 and through 2020.Calculate the balance in the account Investment in Sub as of 12/31/20. Show all computations.Prepare the journal entries Company P recorded with respect to its investment in Company S for the year ended 12/31/20.Separately calculate consolidated net income for 2020Prepare all necessary elimination entries for the year ended 2020.Complete the consolidated workpapers for the year ended 12/31/20.

SOLUTION:- 4.) Acquisition differential amortisation and impairment schedule…

1. 2. 3. 4. 5. 5. Prepare the analysis as of acquisition date including unamortized differential at 1/1/18 and through 2020. Calculate the balance in the account Investment in Sub as of 12/31/20. Show all computations. Prepare the journal entries Company P recorded with respect to its investment in Company S for the year ended 12/31/20. Separately calculate consolidated net income for 2020 Prepare all necessary elimination entries for the year ended 2020. Complete the consolidated workpapers for the year ended 12/31/20.