Homework Problem Part I. Consolidation when NCI is present1. On January 1, 2011, Parrot Enterprise (PE) acquired a 55% interest in Sonn Manufacturing, Inc. (SM). PE paid for the transaction with $3 million cash and 500,000shares of PE common stock (par value $1.00 per share). At the time of the acquisition,SM's book value was $16,970,000.On January 1, PE's stock had a market value of $14.90 per share and there was nocontrol premium in this transaction. Any consideration transferred over book value is assigned to goodwill. SM had the following balances on January 1, 2011.Book Value1/1/2011Fair Value1/1/2011Land $1,700,000 $2,550,000Buildings (7- year remaining life) 2,700,000 3,400,000 Equipment (5-year remaining life) 3,700,000 3,300,000 For internal reporting purposes, PE employed the equity method to account for this investment. The following account balances are for the year ending December 31, 2011