A parent company acquires its subsidiary by exchanging 30,000 shares of its common stock, with a fair value on the acquisition date of $20 per share, for all of the outstanding voting shares of the investee.

a. what is the total fair value of the subsidiary on the acquisition date?

b. prepare the consolidation entry or entries on the date of acquisition given the following balance sheets of the parent and subsidiary on the date of acquisition.

c. prepare the consolidated balance sheet on the date of acquisition.

Balance Sheet Parent Subsidiary Assets Cash..... Accounts receivable. Inventory Equity investment. Property, plant and equipment (PPE), net $ 100,000 200,000 400,000 $ 200,000 300,000 500,000 600,000 1,000,000 $2,600,000 600,000 $1,300,000 Liabilities and stockholders' equity Accounts payable... Accrued liabilities Long-term liabilities Common stock... APIC..... $ 100,000 200,000 800,000 300,000 500,000 700,000 $2,600,000 $ 100,000 200,000 400,000 120,000 180,000 300,000 $1,300,000 Retained earnings