On January 1, 2022, Pacer Corporation (Pacer) acquired 80% of Sprint Ltd. (Sprint) Corp. for $500,000. Please uses the cost method to account for its investment. On January 1, 2022, Sprint's retained earnings and common shares were $350,000 and $110,000, respectively. Sprint's book values did not differ materially from its fair values on the date of acquisition with the following exceptions: • Inventory had a fair value that was $20,000 higher than its book value. This inventory was sold to outsiders during 2022. • A patent (which had not previously been accounted for) was identified on the acquisition date with an estimated fair value of $15,000. The patent had an estimated useful life of 3 years. The financial statements of Pacer and Sprint for the year ended December 31, 2023 are shown below: Income Statements Pacer Corporation Sprint Ltd. Sales $500,000 $300,000 Other revenues 300,000 120,000 Less: expenses Cost of goods sold 400,000 240,000 Depreciation/amortization expense 20,000 10,000 Other expenses 80,000 40,000 Income tax expense 120,000 52,000 Net income $180,000 $78,000 Retained Earnings Statements Pacer Corporation Sprint Ltd. Balance, January 1, 2023 $250,000 $350,000 Net income 180,000 78,000 Less: dividends (30,000) (38,000) Retained Earnings, December 31, 2023 $400,000 $390,000 Balance Sheets Pacer Corporation Sprint Ltd. Cash $50,000 $25,000 Accounts receivable 100,000 250,000 Inventory 50,000 250,000 Investment in Sprint Ltd. 500,000 --------- Land ---------- 25,000 Equipment 400,000 200,000 Accumulated depreciation (250,000) (150,000) Total assets $850,000 $600,000 Current liabilities $320,000 $62,000 Dividends payable 30,000 38,000 Common shares 100,000 110,000 Retained earnings 400,000 390,000 Total liabilities and equity $850,000 $600,000 Other Information: • Pacer sold land to Sprint at a profit of $10,000 during 2023. This land is still owned by Sprint on December 31, 2023. • On January 1, 2023, Sprint sold equipment to Pacer at a price that was $20,000 higher than its book value. The equipment had a remaining useful life of 4 years from that date. • On January 1, 2023, Pacer's inventories contained items purchased during 2022 from Sprint for $12,000. This entire inventory was sold to outsiders during 2023. During 2023, Pacer sold inventory to Sprint for $50,000. 70% of this inventory is still in Sprint's warehouse at year end. All sales are priced at a 25% mark-up above cost, regardless of whether the sales are internal or external. • There was a goodwill impairment loss of $4,000 during 2023. • Both companies are subject to an effective tax rate of 40%. • Both companies use straight line amortization. Required: 1. Calculate goodwill arising from this business combination on the acquisition date. 2. Calculate Non Controlling Interest appearing on Pacer's consolidated balance sheet at January 1, 2022. 3. Calculate sales revenue appearing on Pacer's consolidated income statement for the year ended December 31, 2023? 4. Calculate the amount of unrealized before-tax profits in inventory at the end of 2023? 5. Calculate the amount of consolidated cost of goods sold appearing on the consolidated income statement for the period ending December 31, 2023?