Pullman, Inc. acquired a controlling interest in Sierra Company on 1/1/20×1. At that time, the book value of Sierra Company’s net assets was $16,970,000, including the following:

On 1/1/20×1, Petwoud Company acquired 100% of the $1 par value outstanding voting common stock of Supagud, Inc. for a cash payment of $600,000. At the acquisition date, the fair value of Petwoud Company’s common stock was $20 per share.  Below is the summary balance sheet information of Supagud, Inc. at acquisition (1/1/20×1):                                                                           Debit      CreditAccounts payable                                                          60,000Accounts receivable                                     50,000Additional paid-in capital                                              60,000Buildings (net) (20-year life)                      140,000Cash and short-term investments             70,000Common stock                                                              300,000Equipment (net) (8-year life)                     240,000Intangible assets (indefinite life)             110,000Land                                                              90,000Long-term liabilities (mature 12/31/x3)                   180,000Retained earnings, 1/1/x1                                          120,000Supplies                                                        20,000Totals                                                           720,000     720,000Book value of net equity                           480,000During fiscal year-ending 12/31/20×1 and 12/31/20×2, Supagud, Inc. generated net income and paid dividends as follows:                            Net income  Dividends20x1                     $104,000     $13,00020×2                     $142,000     $30,000As of 1/1/20×1, Supagud’s land had a fair value of $102,000, its buildings were valued at $188,000, and its equipment was appraised at $216,000.  According to Petwoud Company’s analysis, they will record any excess of consideration paid over fair value of assets and liabilities acquired as a Patent asset to be amortized over 6 years.RequiredA.      Using the acquisition method and assuming that Petwoud dissolves Supagud, Inc. so it is no longer in business, prepare Petwoud Company’s journal entry to record the acquisition of Supagud, Inc. at 1/1/20×1.For B. and C. below, assume Supagud remains in business as a separate operating company and that, for internal accounting purposes, Petwoud accounts for their investment in Supagud, Inc. using the equity method:B.       Prepare Petwoud Company’s journal entry to record the acquisition of Supagud, Inc. at 1/1/20×1.C.       Prepare Petwoud Company’s worksheet consolidation journal entries for:                     i.            December 31, 20×1 and                   ii.            December 31, 20×2.