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4-On January 2, 2019, Moonshine, Inc. acquired Cambridge as a wholly-owned subsidiary, paying an excess of $400,000 over the book value of Hudson's net assets.
4-On January 2, 2019, Moonshine, Inc. acquired Cambridge as a wholly-owned subsidiary, paying an excess of $400,000 over the book value of Hudson's net assets. One-half of the excess was attributable to equipment with a 4-year life, leaving the remainder as goodwill. The parent uses the equity method of pre-consolidation Equity investment bookkeeping. The 2020 financial statements for the two companies are presented below. Moonshine, Inc. Cambridge Sales $2,500,000 $600,000 Cost of goods sold -1,800,000 -350,000 Gross profit 700,000 250,000 Operating expenses -386,000 -82,000 Equity income 118,000 Net Income $432,000 $168,000 Retained Earnings, 1/1/20 $2,400,000 $160,000 Net income 432,000 168,000 Dividends -19,500 |-103,000 Retained Earnings, 12/31/20 $2,729,000 $308,500 Cash and receivables $1,250,000 $47,500 Inventory 1,540,000 98,000 Equity investment 683,500 Property, plant & equipment (Net) 360,000 5,605,500 $505,500 $9,079,000 Total Assets $39,000 Accounts payable $450,000 Paragraph Styles 000/ocz/Te 98,000 SAIOPAIROALDUP LUSPO Inventory 1,540,000 Equity investment 683,500 Property, plant & equipment (Net) 5,605,500 360,000 $505,500 Total Assets $9,079,000 Accounts payable $450,000 $39,000 Accrued liabilities 870,000 48,000 Notes payable 2,350,000 35,000 Common stock 480,000 30,000 Additional paid-in capital 2,200,000 45,000 Retained Earnings, 12/31/20 2,729,000 308,500 Total Liabilities and Equities Required: At what amount will the following accounts appear on the consolidated financial statements $9,079,000 $505,500 for 2020? a. Sales b. Equity Income c. Operating Expenses d. Accounts Payable e. Equity Investment f. Property, Plant and Equipment (net of accumulated depreciation) g. Goodwill h. Additional Paid-In Capital 1. Retained Earnings
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