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 subsidiary's Stockholders' Equity on the acquisition date. On the acquisition date, the subsidiary's 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 $900,000 $414,000 Assets Cost of goods sold (495,000) (252,000) Cash $81,000 $54,000 Gross profit 405,000 162,000 Accounts receivable 108,000 81,000 Deprec. & amort. Expense (27,000) (18,000) Inventory 252,000 126,000 Operating expenses (270,000) (72,000) Equity investment 576,000 Interest expense (13,500) (4,500) Property, plant & equipment 306,000 216,000 Total expenses (310,500) (94,500) Other assets 117,000 198,000 Income (loss) from subsidiary 31,500 Total assets $1,440,000 $675,000 Net income $126,000 $67,500 Liabilities and stockholders' equity Accounts payable $225,000 $48,600 Statement of retained earnings Accrued liabilities 22,500 41,400 BOY retained earnings $495,000 $225,000 Notes payable 135,000 54,000 Net income 126,000 67,500 Common stock 540,000 270,000 Dividends (103,500) (31,500) Retained earnings 517,500 261,000 Ending retained earnings $517,500 $261,000 Total liabilities and equity $1,440,000 $675,000a. 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 [!] entries for the year of sale. Parent General Journal Description Debit Credit Cash 89,100 OV Accumulated depreciation V 14,100 O V Gain on sale of equipment O V 18,600 Equipment OV 84,600 To record sale of equipment Subsidiary General Journal Description Debit Credit Equipment 89,100 OV Cash OV 89,100 To record purchase of equipment. Consolidation Journal Description Debit Credit [lgain] Gain on sale of equipment 18,600 O V Equipment 4,500 Accumulated depreciation OV 14,100 [ldep] Accumulated depreciation 1,410 X O V Depreciation expense O V 1,410 xb_ Compute the remaining portion of the deferred gain atJanuary 1, 2019. $ 14,880 V 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 V 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. Equity Investment ("as if" Equity Method) ' Common Stock (S) @ EOY $ 0 x Retained Earnings (S) @ EOV 0 x Add: e 0 x Deduct: 3+ 0 x EOY |nvestment("as if" equity method) '$ 0 X e. Prepare the consolidation entries for the vear ended December 31,2019 e. Prepare the consolidation entries for the year ended December 31, 2019. Consolidation Journal Description Debit Credit [ADJ] Equity investment V O X OV BOY Retained earnings-Parent V O V 0 X [C] Income (loss) from subsidiary V O X OV Dividends V O V O X [E] BOY Common stock (Subsidiary) 0 X OV BOY Retained earnings-Subsidiary V O X OV Equity investment V O V O X [A] PPE, net O X OV Patent O X OV Goodwill V 0 X OV Equity investment OV O X [D] Deprec. & amort. expense V O X OV PPE, net V OV O X Patent O V O X [lgain] Equity investment V O X O V PPE, net V O V O X [ldep] PPE, net V 0 X O V Deprec. & amort. expense V OV 0 X 1'. Prepare the consolidation spreadsheet for the year ended December 31, 2019. Use negative sig with your answers in the Consolidated column for: Cost of goods sold, all expenses (inc. Total expenses) and Dividends. Income statement Sales $900,000 $414,000 S 0 3: Cost of goods sold (495,000) (252,000) 0 x Gross profit 405,000 162,000 0 x Deprec. &amort expense (27,000) (18,000) [D] 0 x 0 x [Idep] 0 3: Operating expenses (270,000) (72,000) 0 x Interest expense (13,500) (4,500) 0 a: Total Expenses (310,500) (94,500) 0 x Income (loss)from subsidiary 31,500 [C] 0 x 0 v Net income $126,000 $67,500 1; 0 x Retained earnings statement: BOY retained earnings $495,000 $225,000 [E] 0 x O x [ADJ] $ 0 a: Net income 126,000 67,500 0 x Dividends (103,500) (31,500) 0 x [C] 0 x Ending retained earnings $517,500 $261,000 S 0 a: Balance sheet: Assets Cash $81,000 $54,000 s 0 3: Accounts receivable 108,000 81,000 0 3: Inventory 252,000 126,000 0 x Equity investment 576,000 - [ADJ] 0 x O X [E] 0 V [ [Igain] o x o x [A] PPE, net 306,000 216,000 [A] 0 x 0 x [D] 0 x [Idep] 0 x O x [Igain] Other assets 117,000 198,000 0 a: Patent [A] x 0 x [D] 0 x Goodwill - - [A] x O x Totalassets $1,440,000 $675,000 S O X Liabilities & stockholders' equity Accounts payable $225,000 $48,600 $ 0 x Accrued liabilities 22,500 41,400 0 x Notes payable 135,000 54,000 0 a: Common stock 540,000 270,000 [E] 0 x 0 x EOY Retained earnings 517,500 261,000 - - 0 at Total liabilities and equity $1,440,000 $675,000 $ 0 3: $ 0 x s 0 x