4 On January 1, 2020, Parent Corporation acquired all of the outstanding common 5 stock of Sub Company for $4,590 cash. 6 7 The balance sheets of Parent and Sub, immediately prior to the combination, are 8 shown below: 9 10 Balance Sheets Parent 11 Assets Sub 12 Cash and receivables $ 5,148 $ 13 1,296 Inventory 3,060 1,620 Long-term investments 0 540 15 Land 1,170 315 16 Buildings and equipment, net 4,320 1,080 17 Total assets $ 13,698 $ 4,851 18 19 Liabilities and Stockholders' Equity 20 Current liabilities $ 2,700 $ 1,800 21 Long-term debt 3,600 720 22 Common stock, par value 900 180 23 Additional paid-in capital 2,160 630 24 Retained earnings 4,338 1,521 25 Total liabilities and equity $ 13,698 $ 4,851 26 27 Several of Sub's assets and liabilities had fair values that were different 28 from their book values. Estimates of the fair values of these items follow: 29 30 Inventory $ 1,440 31 Long-term investments 450 32 Land 756 33 Buildings and equipment, net 1,620 700 34 Long-term debt 35 36 In addition, Sub had previously unrecorded identifiable intangible assets 37 valued at $198. 38 39 Required: 40 41 (a) Calculate goodwill or gain on acquisition. 42 43 (b) Prepare a working paper to consolidate the balance sheets of Parent and Sub at January 1, 2020 (complete the consolidation worksheet on pg2). 45 Don't forget to record the acquisition in the accounts of Parent on the consolidation worksheet. DATA PAGE LAYOUT FORMULAS REVIEW VIEW HOME INSERT Conditional Formats Formatting Table SH 1 Cut Calibri Copy BLUSA E Merge Center S. Format Painter board Font Alignment ber fx Consolidation Immediately After Acquisition D E F H Consolidation immediately. Consolidation Consolidation Immediately After Acquisition ge 2 of 2] Prepare a working paper to consolidate the balance sheets of Parent and Sub of lanuary 1, 2020. Remember to use negative signs for credit amounts in the Dr (Cr) columns Consolidation Working Paper Accounts Taken from Books Eliminating Entries Parent Sub (E) Consolidated Balances Dr. (C) Dr. (0 Dr. ( After Acquis. Dv. (Cr.) 1,296 1,620 3,060 540 315 1,080 0120 Before Acquis. Acquisition Cash and receivables 5,148 Inventory Long-term investments 5 Investment in Sub 7 Land 1.170 18 Buildings and equipment, 19 Identifiable intangible assets 20 Goodwill (if applicable) 21 Current liabilities (2.700) 22 Long-term debt (3.600) 23 Common stock, par value 1900) 24 Additional paid in capital 12,160 25 Retained earrings 26 Tot 0 20 28 29 10 31 72 33 (720) (110 (630) (1,521 33