3. Parent company acquired 100% of Filia Inc. on January 31, 20X2 in exchange for cash. The book value of Filia's individual assets and liabilities approximated their acquisition-date fair values. On the date of acquisition, Filia reported the following: $ 175,000 Current Liabilities $ 60,000 Cash Inventory 50,000 Plant Assets (net) 160,000 Common Stock 50,000 Property 250.000 Retained Earnings 525,000 Total Assets $ 635.000 Total Liabilities & Equity$ 635,000 a. Parent purchases sub for $170,000. Sub's fmx = NAV except inventory + 10,000 and patent with a 5 yr life, +25,000. What is the differential? Goodwill? How will the differential affect the first year's income from sub? b. Following are the financials for the parent and sub in A after one year of operations. Using this information, create the entries needed for consolidation and the consolidated financials. I/S SUB Sales PARENT $365,000 (220,000) $180,000 COGS 190,000) 145,000 90,000 62,000 0 (8,000) (45,000) (45,000) $ 117,000 (5,000) $77,000 Gross Margin Income from Sub Depreciation Exp Other Op expenses Net Income Statement of R/E Beginning R/E Net Income Less Dividends Ending R/E $ 152,000 $ 30,000 117,000 77,000 (50,000) (47,000) $ 219,000 $ 60,000 B/S $ 80,000 $ 35,000 Cash & Receivables Investment in sub (185,000) 60,000 Inventory 50,000 Land 100,000 60,000 PP&E 136,000 Total Assets $ 561,000 52,000 $197,000 $ 47,000 20,000 A/P $ 92,000 Common Stock 50,000 APIC 200,000 70,000 R/E 219,000 60,000 Equity & Liabilities $ 561,000 $197,000