8-Morningside Co. acquires, at book value, Glacier Industries on January 2, 2019, by issuing 40,000 common shares, $1 par, with a market value on the acquisition date of $10 per share. The book values of Glacier's individual net assets approximate their fair values. The separate financial statements of the parent and subsidiary, for the year ended December 31, 2019, are presented below. Morningside Co. Glacier Industries Sales revenue $850,000 $400,000 Cost of goods sold -635,000 -268,000 Gross profit 215,000 132,000 Operating expenses -156,400 -90,500 Equity income 41,500 Net Income $100,100 $41,500 Retained Earnings, 1/1/19 $550,000 $219,600 Net income 100,100 41.500 ambling.instructure.com/courses/8673/assignments/134959 Retained Earnings, 1/1/19 $550,000 $219,600 Net income 100,100 41,500 Dividends -41,000 -13,650 Retained Earnings, 12/31/19 $609,100 $247,450 Cash and receivables $450,000 $25,000 Inventory 355,000 12,570 Equity investment 427,850 Property, plant & equipment (Net) 751,950 412,390 Total Assets $1,984,800 $449.960 Accounts payable $371,200 $54,000 487.500 Accrued liabilities e 30,000 21,900 Additional paid-in capital 487,000 38,500 Retained Earnings, 12/31/19 609,100 247,450 Total Liabilities and Equities $1,984,800 $449,960 Required: a. Prepare the journal entry on Morningside's books to record the acquisition. b. Prepare a schedule showing how the balance in Equity Investment was arrived at. c. Prepare all consolidation entries for the year ending December 31, 2019. Previous 8-Morningside Co. acquires, at book value, Glacier Industries on January 2, 2019, by issuing 40,000 common shares, $1 par, with a market value on the acquisition date of $10 per share. The book values of Glacier's individual net assets approximate their fair values. The separate financial statements of the parent and subsidiary, for the year ended December 31, 2019, are presented below. Morningside Co. Glacier Industries Sales revenue $850,000 $400,000 Cost of goods sold -635,000 -268,000 Gross profit 215,000 132,000 Operating expenses -156,400 -90,500 Equity income 41,500 Net Income $100,100 $41,500 Retained Earnings, 1/1/19 $550,000 $219,600 Net income 100,100 41.500 ambling.instructure.com/courses/8673/assignments/134959 Retained Earnings, 1/1/19 $550,000 $219,600 Net income 100,100 41,500 Dividends -41,000 -13,650 Retained Earnings, 12/31/19 $609,100 $247,450 Cash and receivables $450,000 $25,000 Inventory 355,000 12,570 Equity investment 427,850 Property, plant & equipment (Net) 751,950 412,390 Total Assets $1,984,800 $449.960 Accounts payable $371,200 $54,000 487.500 Accrued liabilities e 30,000 21,900 Additional paid-in capital 487,000 38,500 Retained Earnings, 12/31/19 609,100 247,450 Total Liabilities and Equities $1,984,800 $449,960 Required: a. Prepare the journal entry on Morningside's books to record the acquisition. b. Prepare a schedule showing how the balance in Equity Investment was arrived at. c. Prepare all consolidation entries for the year ending December 31, 2019. Previous
