Assume a parent company acquired a subsidiary on January 1, 2015 for $576,000. The purchase price was $207,000 in excess of the book value of the subsidiarys Stockholders Equity on the acquisition date. On the acquisition date, the subsidiarys stockholders equity was comprised of $270,000 of nopar common stock and $99,000 of retained earnings. The Acquisition Accounting Premium (AAP) was assigned as follows: an increase of $9,000 in accounts receivable that were entirely collected during the year after acquisition, an increase of $45,000 for property, plant and equipment that has 10 years of remaining useful life, $72,000 for an unrecorded patent with an 8-year remaining life and $81,000 for goodwill. All amortizable components of the AAP are amortized using the straight-line method.

On January 1, 2017, the parent sold Equipment to the subsidiary for a cash price of $89,100. The parent had acquired the equipment at a cost of $84,600 and depreciated the equipment over its 12-year useful life using the straight-line method (no salvage value). The parent had depreciated the equipment for 2 years at the time of sale. The subsidiary retained the depreciation policy of the parent and depreciates the equipment over its remaining 10-year useful life

Following are financial statements of the parent and its subsidiary as of December 31, 2019. The parent uses the cost method of pre-consolidation investment bookkeeping.

Just need help with D, E, and F

Parent Subsidiary Parent Subsidiary Income statement Balance sheet Sales Cost of goods sold Gross profit Deprec. & amort. Expense Operating expenses Interest expense Total expenses Income (loss) from subsidiary $54,000 81,000 126,000 $900,000 (495,000) 405,000 (27,000) (270,000) (13,500) (310,500) 31,500 $126,000 $414,000 Assets (252,000) Cash 162,000 Accounts receivable (18,000) Inventory (72,000) Equity investment (4,500) Property, plant & equipment (94,500) Other assets $81,000 108,000 252,000 576,000 306,000 117,000 $1,440,000 216,000 198,000 $675,000 Total assets Net income Statement of retained earnings BOY retained earnings $495,000 Net income 126,000 Dividends (103,500) Ending retained earnings $517,500 $67,500 Liabilities and stockholders' equity Accounts payable Accrued liabilities $225,000 Notes payable 67,500 Common stock (31,500) Retained earnings $261,000 Total liabilities and equity $225,000 22,500 135,000 540,000 517,500 $1,440,000 $48,600 41,400 54,000 270,000 261,000 $675,000 a. Prepare the journal entry that the parent made to record the sale of the equipment to the subsidiary, the journal entry that the subsidiary made to record the purchase, and the [1] entries for the year of sale. Parent General Journal Description Debit Credit Cash 89,100 Accumulated depreciation 14,100 Gain on sale of equipment 18,600 Equipment 84,600 To record sale of equipment + 0 Subsidiary General Journal Description Debit Equipment 89,100 Cash To record purchase of equipment, Credit 0 89,100 Credit 0 Consolidation Journal Description Debit [lgain] Gain on sale of equipment 18,600 Equipment Accumulated depreciation [idep] Accumulated depreciation 1,410 x Depreciation expense 4,500 14,100 1,410 x b. Compute the remaining portion of the deferred gain at January 1, 2019. $ 14,880 C. Prior to preparing consolidated financial statements, compute the amount of equity income the parent would have reported for the year ended December 31, 2019 assuming the parent applied the equity method instead of the cost method of pre-consolidation bookkeeping. $ 0. d. Prior to preparing consolidated financial statements, compute the amount of Equity investment the parent would have reported on December 31, 2019 assuming the parent applied the equity method instead of the cost method of pre-consolidation bookkeeping. Do not use negative signs with your answers below. 0 x Equity Investment ("as if" Equity Method) Common Stock (S) @ EOY $ Retained Earnings (S) @ EOY Add: X 0 x 0 x Deduct: 0 x EOY Investment ("as if" equity method) $ 0 % e. Prepare the consolidation entries for the year ended December 31, 2019. e. Prepare the consolidation entries for the year ended December 31, 2019. Consolidation Journal Description Debit Credit [AD]] Equity investment 0 x 0 BOY Retained earnings-Parent . O 0 x [C] Income (loss) from subsidiary A 0 x 0 Dividends . 0 0 x [E] BOY Common stock (Subsidiary) 0 x O BOY Retained earnings-Subsidiary 0 x 0 Equity investment . 0 0 x [A] PPE, net 0 x 0 Patent 0 x 0 0 x 0 . 0 0 x Goodwill Equity investment Deprec. & amort. expense PPE, net [D] A > 0 x 0 . 0 0 x Patent O 0 x . 0 x O 0 0 x [lgain] Equity investment PPE, net [ldep] PPE, net Deprec. & amort. expense A > 0 x 0 . 0 0 x Parent Subsidiary Parent Subsidiary Income statement Balance sheet Sales Cost of goods sold Gross profit Deprec. & amort. Expense Operating expenses Interest expense Total expenses Income (loss) from subsidiary $54,000 81,000 126,000 $900,000 (495,000) 405,000 (27,000) (270,000) (13,500) (310,500) 31,500 $126,000 $414,000 Assets (252,000) Cash 162,000 Accounts receivable (18,000) Inventory (72,000) Equity investment (4,500) Property, plant & equipment (94,500) Other assets $81,000 108,000 252,000 576,000 306,000 117,000 $1,440,000 216,000 198,000 $675,000 Total assets Net income Statement of retained earnings BOY retained earnings $495,000 Net income 126,000 Dividends (103,500) Ending retained earnings $517,500 $67,500 Liabilities and stockholders' equity Accounts payable Accrued liabilities $225,000 Notes payable 67,500 Common stock (31,500) Retained earnings $261,000 Total liabilities and equity $225,000 22,500 135,000 540,000 517,500 $1,440,000 $48,600 41,400 54,000 270,000 261,000 $675,000 a. Prepare the journal entry that the parent made to record the sale of the equipment to the subsidiary, the journal entry that the subsidiary made to record the purchase, and the [1] entries for the year of sale. Parent General Journal Description Debit Credit Cash 89,100 Accumulated depreciation 14,100 Gain on sale of equipment 18,600 Equipment 84,600 To record sale of equipment + 0 Subsidiary General Journal Description Debit Equipment 89,100 Cash To record purchase of equipment, Credit 0 89,100 Credit 0 Consolidation Journal Description Debit [lgain] Gain on sale of equipment 18,600 Equipment Accumulated depreciation [idep] Accumulated depreciation 1,410 x Depreciation expense 4,500 14,100 1,410 x b. Compute the remaining portion of the deferred gain at January 1, 2019. $ 14,880 C. Prior to preparing consolidated financial statements, compute the amount of equity income the parent would have reported for the year ended December 31, 2019 assuming the parent applied the equity method instead of the cost method of pre-consolidation bookkeeping. $ 0. d. Prior to preparing consolidated financial statements, compute the amount of Equity investment the parent would have reported on December 31, 2019 assuming the parent applied the equity method instead of the cost method of pre-consolidation bookkeeping. Do not use negative signs with your answers below. 0 x Equity Investment ("as if" Equity Method) Common Stock (S) @ EOY $ Retained Earnings (S) @ EOY Add: X 0 x 0 x Deduct: 0 x EOY Investment ("as if" equity method) $ 0 % e. Prepare the consolidation entries for the year ended December 31, 2019. e. Prepare the consolidation entries for the year ended December 31, 2019. Consolidation Journal Description Debit Credit [AD]] Equity investment 0 x 0 BOY Retained earnings-Parent . O 0 x [C] Income (loss) from subsidiary A 0 x 0 Dividends . 0 0 x [E] BOY Common stock (Subsidiary) 0 x O BOY Retained earnings-Subsidiary 0 x 0 Equity investment . 0 0 x [A] PPE, net 0 x 0 Patent 0 x 0 0 x 0 . 0 0 x Goodwill Equity investment Deprec. & amort. expense PPE, net [D] A > 0 x 0 . 0 0 x Patent O 0 x . 0 x O 0 0 x [lgain] Equity investment PPE, net [ldep] PPE, net Deprec. & amort. expense A > 0 x 0 . 0 0 x