Advanced Accounting:

in 1/1/2019 company A purchased 75% of company B outstanding share capital cash of 250000 $, and it issued 50,000 shares for investment. The book value of issued shares is 6$, and market value is 15$. And it paid 4000$ cash as a commission and 8000$ auditing and legal expenses for combination.

Company A used purchase method to account for investment in company B and used equity method to address the change of investment account.

Below are the financial statements of A and B companies before investment.

Account	Company A	Company B book value fair value
Cash Receivables Inventory Equipment Cars	190000 130000 180000 100000 60000	60000 120000 45000 80000 60000 50000 40000 80000 10000 90000
Total assets	660000	215000 420000
Payable Share capital Additional paid-in capital Retained Earnings	210000 350000 75000 25000	65000 20000 120000 20000 10000
Total	660000	215000

The financial statement of parent and subsidiary at 31/12/2019 reported as follow:

Income statements at 31/12/2019
	A company	B company
Sales Cost of goods sold Gross profit Managerial and sales expenses Net profit Investment profit in subsidiary Year net profit	800000 150000 (650000) (80000)
	150000 70000 (25000) (10000)
	125000	60000
	??
	??

Retained earnings at 31/12/2019
	A company	B company
Retained earning 1/1	??	10000
Year profits or losses	??	60000
Dividends	(130000)	(25000)
Retained earnings 31/12	??	45000

SFP on 31/12/2019
	A company	B company
Cash	6000	44000
Receivables	96200	85000
Inventory	175000	48000
Prepaid dividends	??
Investment in company B	??
Equipments, net	80000	85000
Cars	30000	13000
Total assets	??	275000
Payable	35000	65000
Accrued dividends	130000	??
Share capital	400000	120000
Additional paid in capital	145000	20000
Retained earnings	??	45000
Total liabilities and equity	??	275000

The following are additional information related to subsidiary company:

1. Remaining age of Equipment that are in the subsidiary company at date of acquisition (1/1/2019) is 4 years.
2. At the year of 2019, 75% of inventory have been sold. And remaining inventory have been sold on 2020.
3. Remaining age of Cars that are in the subsidiary company at date of acquisition (1/1/2019) is 4 years.

Requirement:

1. Prepare the consolidated financial statement at the date of acquisition.
2. Prepare the consolidate financial statements for the year of acquisition.