Parent Corp. purchased 100% of the outstanding shares of Subsidiary Corp. on January 1, 20X1, for $1,000,000. The Statement of Financial Position (SFP) of Subsidiary Corp. and the fair values of the different accounts are provided below.

The buildings are being depreciated using straight-line depreciation and had a future life of five years on the date of acquisition. All current assets and liabilities turned over by the end of 20X1.

The separate-entity financial statements of Parent Corp. and Subsidiary Corp. for 20X2 are provided below.

Additional information:
–  Subsidiary Corp. sold goods worth $300,000 at a gross profit of 25% to Parent Corp. in 20X0 (the year before 20X1). All of these goods remained unsold in Parent Corp.€™s ending inventory at the end of year 20X0. Half of these goods were sold in 20X1, and the remaining half was sold in 20X2 to outsiders by Parent Corp.
–  Subsidiary Corp. sold goods worth $250,000 at a gross profit of 30% to Parent Corp. in 20X1. One-third of these goods remained unsold with Parent Corp. at the end of 20X1. Parent Corp. sold goods worth $300,000 at a gross profit of 25% to Subsidiary Corp. in 20X1. Half of these goods remained unsold with Subsidiary Corp. at the end of 20X1.
–  Subsidiary Corp. sold goods worth $200,000 at a gross profit of 30% to Parent Corp. in 20X2. Half of these goods remained unsold with Parent Corp. at the end of 20X2. Parent Corp. sold goods worth $350,000 at a gross profit of 25% to Subsidiary Corp. in 20X2. Forty percent of these goods remained unsold with Subsidiary Corp. at the end of 20X2.
–  Subsidiary Corp. sold all of its investments in 20X2 to Parent Corp. for $145,000.

Required
a. Show the purchase price allocation calculations required at the time of acquisition and the goodwill balance at the time of acquisition.

b. Show all necessary consolidation adjustments required in 20X2 relating to 20X1 and 20X2 (i.e., show the remaining adjustments other than the acquisition-related adjustments required in item a, necessary under the MEAR steps).

c. Calculate the consolidated retained earnings balance at the end of 20X1.

d. Calculate the adjusted income of Subsidiary Corp. and the adjusted income of Parent Corp. for 20X2.

e. Calculate the consolidated income in 20X2.

f. Calculate the consolidated retained earnings balance at the end of 20X2.

g. Calculate the consolidated gross (i.e., original cost) and net balance (i.e., after deductin accumulated depreciation) of the buildings account at the end of 20X2.

h. Calculate the consolidated goodwill balance at the end of 20X2.

i. Calculate the consolidated investment account balance at the end of 20X2.

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Subsidlary Co. Statement of Financial Position January 1, 20X1 Fair value $ 250,000 Net carrying value $ 250,000 Cash Accounts receivable 150,000 150,000 Inventory 175,000 250,000 Land & buildings 550,000 550,000 Less accumulated depreciation (250,000) Investments 150,000 115,000 Goodwill 160,000 TOTAL ASSETS $1,150,000 $1,350,000 $ 200,000 $ 225,000 Accounts payable Long-term debt Shareholders' equity Contributed capital 325,000 325,000 450,000 Retained earnings 150,000 $ 525,000 $1,150,000 TOTAL LIABILITIES & OWNERS' EQUITY Parent Corp. Statement of Financlal Positlon December 31, 20X2 Cash $1,155,000 Accounts Receivable 100,000 Inventory 300,000 Land & buildings 650,000 Less accumulated depreciation (580,000) Investments 145,000 Investment in subsidiary 1,000,000 Goodwill 250,000 TOTAL ASSETS $3,020,000 Accounts payable $ 350,000 Long-term debt Shareholders' equity Contributed capital Retained earnings 750,000 750,000 1,170,000 TOTAL LIABILITIES & OWNERS' EQUITY $3,020,000