66. Comprehensive consolidation suhsequent to date of acquisition-Fquity method, noncontrolling LOR, 3 interest, AAP' computation, goodwill, upstream and downstream intercompany inventory profits, downstream intercompany depreciable asset gain A parent company acquired 80% of the stock of a subsidiary company on January 1,2018 , for $250,380. On this date, the balances of the subsidiary's stockholders' equity accounts were Common Stock, $156,000, and Retained liarnings, $31,200. On January 1, 2018, the market value for the 20% of shares not purchased by the parent was $61,620. On January 1,2018, the subsidiary's recorded book values were equal to fair values for all items except four: (1) accounts reccivable had a book value of $39,000 and a fair valuc of $33,800, (2) buildings and equipment, net had a book value of $65,000 and a fair value of $88,400, (3) the licenses intangible asset had a book valuc of $45,500 and a fair value of $100,100, and (4) notes payahle had a book value of $26,000 and a fair value of $18,200. Both companies use the FIIO inventory method and sell all of their inwenlories at least once per year. The net halance of accounts receivables are collocted in the following year. On the acquisition dute, the subsidiary's buildings and equipment, net had a remaining useful life of 6 years, licenses had a remaining useful life of 7 years, and notes payable had a remaining term of 4 years. On January 1, 2021, the parent sold a building to the subsidiary for $104,000. On this date, the huilding was carried on the parent's books (net of accumulated depreciation) at $84,500. Both companies estimated that the building has a remaining life of 6 years on the intercompany sale date, with no salvage valuc. Fiach company routincly sells merchandise to the other company, with a profit margin of 25 percent of selling price (regardless of the direction of the sale). During 2022, intercompany sales amount to $19,500, of which $10,400 of merchandise remains in the ending inventory of the parent. On December 31,2022,$5,200 of these intercompany sales remainod unpaid. Additionally, the subsidiary's December 31,2021 imventory includes $15,600 of merchandise purchased in the preceding year from the parent. During 2021, intercompany sales amount to $26,000, and on Docember 31,2021,$7,800 of these intercompany sales remained unpaid. 378 Chapter 5 | Consolidated Financial Statements with Less Than 1008 Ownership e Cambridge Business Publishors The parent accounts for its liquity Investment in the subsidiary using the equity mothod. Unconfirmed profits are allocated pro-rata. The pre-consolidation financial statements for the two companies For the year endod December 31, 2022, are provided below: a. Disuggregale and document the activity for the 100\%, Acquisition Acoounting Premium (AAP), the controlling interest ANP, and the noncontrolling interest A.AP. b. Calculate and organixe the profits and losses on inlercompany transactions and halances. c. Compute the pre-consolidation Fiquity Investment account heginning and ending halances slarting with the slockholders' equity of the subsidiary. d. Reconstruct the activity in the parent's pre-consolidation Fiquity Investment T-account for the year of consolidation. e. Independently compute the owners' equity attributable to the noncontrolling interest beginning and ending halances slarting with the owners' equity of the subsidiary. f. Independently calculate consolidated net income, controlling interest net income, and noncontrolling interest net income. g. Complete the consolidating entries according to the C-N-A-D-I sequence and complete the consolidation workshoct