62. Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries) Assume the parent company acquires its subsidiary by exchanging 50,000 shares of its $1 par value Common Stock, with a fair value on the acquisition date of $30 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsid- iary's assets and liabilities at an amount equaling their book values except for an unrecorded Trademark with a fair value of $120,000, an unrecorded Video Library valued at $300,000, and Patented Technol- ogy with a fair value of $60,000. a. Prepare the journal entry that the parent makes to record the acquisition. b. Given the following acquisition-date balance sheets of the parent and the subsidiary, prepare the consolidation entries. Balance Sheet Parent Subsidiary Assets Cash....... Accounts receivable.. Inventory ...... Equity investment........ Property, plant and equipment (PPE), net ..... $120,000 300,000 400,000 $ 250,000 200,000 300,000 1,500,000 2,000,000 $4,250,000 800,000 $1,620,000 Liabilities and stockholders' equity Accounts payable...... Accrued liabilities .... Long-term liabilities ..... Common stock .... APIC............... Retained earnings ... $ 200,000 250,000 1,800,000 400,000 600,000 1,000,000 $4,250,000 $ 80,000 140,000 500,000 100,000 200,000 600,000 $1,620,000 c. Prepare the consolidation spreadsheet. d. Where were the intangible assets on the parent or subsidiary's balance sheets? 62. Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries) Assume the parent company acquires its subsidiary by exchanging 50,000 shares of its $1 par value Common Stock, with a fair value on the acquisition date of $30 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsid- iary's assets and liabilities at an amount equaling their book values except for an unrecorded Trademark with a fair value of $120,000, an unrecorded Video Library valued at $300,000, and Patented Technol- ogy with a fair value of $60,000. a. Prepare the journal entry that the parent makes to record the acquisition. b. Given the following acquisition-date balance sheets of the parent and the subsidiary, prepare the consolidation entries. Balance Sheet Parent Subsidiary Assets Cash....... Accounts receivable.. Inventory ...... Equity investment........ Property, plant and equipment (PPE), net ..... $120,000 300,000 400,000 $ 250,000 200,000 300,000 1,500,000 2,000,000 $4,250,000 800,000 $1,620,000 Liabilities and stockholders' equity Accounts payable...... Accrued liabilities .... Long-term liabilities ..... Common stock .... APIC............... Retained earnings ... $ 200,000 250,000 1,800,000 400,000 600,000 1,000,000 $4,250,000 $ 80,000 140,000 500,000 100,000 200,000 600,000 $1,620,000 c. Prepare the consolidation spreadsheet. d. Where were the intangible assets on the parent or subsidiary's balance sheets