A B C D E F 4 5 On January 2, 2018, Parent Corporation acquired 75% of Subsidiary Company's outstanding common stock. 6 In exchange for Subsidiary's stock, Parent issued bonds payable with a par value of $500,000 7 and fair value of $510,000 directly to the selling stockholders of Subsidiary. 8 At that date, the fair value of the noncontrolling interest was $170,000. K M 10 11 The two companies continued to operate as separate entities subsequent to the combination 12 Immediately prior to the combination the book value and fair value of the companies' assets and liabilities were as follows: 13 14 Also, at the date of combination, Subsidiary owed Parent $6,000 plus accrued interest of $500 on a short-term note. Both companies have properly recorded these amounts 15 16 17 18 Parent Corporation Subsidiary Corporation 19 Book Value Fair Value Book Value Fair Value 20 21 Cash $ 12,000 $ 12,000 $ 9,000 $ 9,000 22 Receivables 41,000 39,000 31,000 30,000 23 Allowance for Bad Debts (2,000) (1,000) 241 Inventory 86,000 89,000 68,000 72,000 25 land 55,000 200,000 50,000 70,000 26 Buildings & Equipment 960,000 650,000 670,000 500,000 Accumulated Depreciation (411,000) (220,000) 28 Patent 40,000 29 Total Assets $ 741,000 $ 990,000 $ 607,000 $ 721,000 30 31 Current Payables $ 38,000 $ 38,000 $ 29,000 29,000 32 Bonds Payable 200,000 210,000 100,000 100,000 33 Common Stock 300,000 200,000 34 Additional Paid-in-Capital 100,000 130,000 35 Retained Eamings 103,000 148,000 36 Total Liabilities & Equity $ 741,000 $ 607,000 37 38 + 391) Record the business combination on the books of Parent Corporation. 40 41 Date Accounts 42 43 235 44 45 46 Debit Credit B 5 6 2) Show and label the calculation of the total Differential. Put a box around the final answer. 7 8 93) Show and label the calculation of the total Goodwill (if any). Put a box around the final answer. 10 71 22 73 74 75 76 + 77 78 79 80 81 821 83 84 B5 86 87 Record the consolidation entries emanating) needed in a worksheet to prepare a Convidated Balance Sheet immediately folowing the business combination on January 2, 2018 S Prepare & Consdated Balance Sheet Worksheet as of January 2, 2018 dutely following the business combination Pare Consolidation Entries Debit Crede Consolidated Date Accounts Deb Cred Corporation 12,000 5 1000 41,000 1000 Alance for Bed entary (2000) (1000) $1,000 $8,000 and 55,000 50,000 &qt 960,000 $70,000 Accumulated Degradation 220,000 $30,000 Unte 0000 $ 38.000 S 15,000 100.000 300,000 Bonds Premiu 10.000 Common Stock 300,000 100000 130,000 10000 14000 43