Accounts receivable 3. Equity investment + Property, plant and equipment (PPE), net in Goodwill Common stock 7. APIC 3. Retained earnings What intangible assets will be reported on the consolidated balance sheet and at what amounts Why were they not previously reported in pre-acquisition financial statements of the parentor subsidiary? 47. Consolidation several years subsequent to date of acquisition-Equity method Assume that a parent company acquired a subsidiary on January 1, 2014. The purchase price $665,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date that excess was assigned to the following [A] assets:Chapter 3 | Consolidated Financial Statements Subsequent to the Date of Acquisition 167 [A] Asset Original Original Amount Useful Life Property, plant and equipment (PPE), net $140,000 16 years Patent . . . . . . 245,000 7 years License . ... Goodwill . . . . 105,000 10 years 175,000 Indefinite $665,000 The [A] assets with definite useful lives have been depreciated or amortized as part of the parent's pre- consolidation equity method accounting. The Goodwill asset has been tested annually for impairment, and has not been found to be impaired. as follows: The financial statements of the parent and its subsidiary for the year ended December 31, 2016, are Parent Subsidiary Parent Subsidiary Income statement: Balance sheet: Sales. $4,802,000 $1,308,300 Assets Cost of goods sold. (3,457,300) (784,700) Cash . . $ 719,600 $ 337,400 Gross profit. . .. ,344,700 523,600 Accounts receivable . 1,229,200 303,800 Equity income. . ... 129, 150 nventory 1,624,000 389,900 Operating expenses . . . . (720,300) 340,200) Equity investment. .... . . . . . . 1,530,550 Net income . . . $ 753,550 183,400 Property, plant and equipment (PPE), net . . . 2,923,200 721,000 $8,026,550 $1,752, 100 Statement of retained earnings: BOY retained earnings . ... $1,694,700 676,200 Liabilities and stockholders' equity Net income . . . 753,550 183,400 Accounts payable. .... $ 702,800 $ 124,600 Dividends . . .. (364,000) (28,000) Accrued liabilities . 835,800 163, 100 Ending retained earnings . . $2,084,250 $ 831,600 Long-term liabilities . .. . . . . . . . . . . . .. 2, 100,000 436, 100 Common stock. . .. 527,100 87,500 APIC . .. 1,776,600 109,200 Retained earnings 2,084,250 831,600 $8,026,550 $1,752,10 a . Compute the Equity Investment balance as of January 1, 2016. b . Show the computation to yield the $129, 150 equity income reported by the parent for the year ended December 31, 2016. C . Show the computation to yield the $1,530,550 Equity Investment account balance reported by the parent at December 31, 2016. d. Prepare the consolidation entries for the year ended December 31, 2016. e . Prepare the consolidation spreadsheet for the year ended December 31, 2016. Inferring consolidation entries from consolidated financial statements-Equity method LO2 Assume that a parent company acquired a subsidiary on January 1, 2012. The purchase price was $396,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and X that excess was assigned to the following [A] assets: LILLU Original Original