Assume that a parent company acquires a 70% interest in a subsidiary for a purchase price of $1,078,000. The excess of total fair value of controlling and noncontrolling interests over book value is assigned to; a building (PPE net) that is worth $100,000 more than book value, an unrecorded patent valued at $200,000 and goodwill valued at $300,000. Goodwill is assigned proportionately to the controlling and noncontrolling interests.

Submission Requirements:

Using the ACT470_Mod03-Option01.xlsx Excel spreadsheet in the Module 3 folder:

• Prepare the consolidated balance sheet at the date of acquisition by placing the appropriate entries in their respective debit/credit column cells.
• Indicate, in the blank column cell to the left of the debit and credit column cells if the entry is an [E] or [A] entry.
• Use Excel formulas to derive the Consolidated column amounts and totals.
• Using the Home key in Excel, go to the Styles area and highlight the [E] and [A] entry cells in different shades.

Consolidation Entries Parent Subsidia Consolidated Cash Accounts receivable Inventory Equity investment 920,000 782,000 1,100,000 1,078,000 215,000 330,000 425,000 0 0 0 Property, plant and equipment (PPE), net Patent Goodwill Total assets 5,400,000 800,000 0 0 9,280,000 1,770,000 Current liabilities Long-term liabilities Common stock Additional paid-in capital Retained earnings Noncontrolling interest 810,000 4,000,000 920,000 700,000 2,850,000 330,000 500,000 90,000 120,000 730,000 0 0 0 0 0 Total liabilities and equity 9,280,000 1,770,000