The following items appeared in the first two columns of a work sheet prepared to consolidate the balance sheets of Parent Company and Subsidiary Company on the day Parent Company gained control of Subsidiary Company by purchasing 29,750 shares of its \(\$ 10\) par value common stock at \(\$ 13\) per share.

At the time Parent Company acquired control of Subsidiary Company, it took Subsidiary Company's note in exchange for \(\$ 54,000\) in cash and it sold and delivered \(\$ 3,000\) of equipment at cost to Subsidiary Company an open account (account receivable). Both transactions are reflected in the foregoing accounts.

\section*{Required}
1. Prepare a work sheet to consolidate the balance sheets of the two companies and prepare a consolidated balance sheet.
2. Under the assumption that Subsidiary Company earned \(\$ 50,000\) during the first year after it was acquired by Parent Company, paid out \(\$ 32,500\) in dividends, and retained the balance of its earnings in its operations, give the entry to eliminate Parent Company's investment in the subsidiary and Subsidiary Company's stockholders' equity accounts at the year's end.
\section*{Problem 15-4A \\ Foreign currency transactions}

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Cash Assets Note receivable, Subsidiary Company Accounts receivable, net Inventories Parent Subsidiary Company Company $ 37,250 $ 72,500 54,000 110,000 80,000 215,000 162,500 Investment in Subsidiary Company. 386,750 Equipment, net 461,250 257,500 Buildings, net 337,500 Land. 150,000 Total assets. $1,751,750 $572,500 Liabilities and Stockholders' Equity Accounts payable Common stock Note payable, Parent Company Retained earnings Total liabilities and stockholders' equity. $ 257,500 875,000 619,250 $1,751,750 $ 98,500 54,000 350,000 70,000 $572,500