Assume that a parent company acquires its subsidiary on 1 1 xx, by exchanging 41,500 shares of its $1 par value common stock, with a market value on acquisition date of $36 per share, for all of the outstanding voting shares of the subsidiary You have been charged with preparing the consolidation of these two entities at 12 31 xx On acquisition date (1 1 xx), all of the subsidiarys assets and liabilities had fair values equaling their book values except PPE assets are undervalued by $81,000 (depreciation $5,400 per year), the subsidiary has an unrecorded patent with a fair value of $261,000 (amortization $32,625 per year) and the parent records $162,000 of goodwill in the transaction Submission Requirements Using the ACT470 Mod02 Option02 xlsx Excel spreadsheet in the Module 2 folder Prepare the consolidated balance sheet at 12 31 xx 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 a C , E or A or D 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 C , E , A and D cell entries in different shades ACT470 Module 2 Option 2 Consolidation Entries Subsidiar 4,950,000 1485,000 594,000 Parent Cr Consolidated Income Statement Sales Cost of goods sold Gross proft Equity income Operatingexpenses Net income (3 465,000) 891,000) 1,485,000 169,875 (940,500) 386,100) 714,375 207,900 Statement of retained earnings BOY retained earnings Net income 2,570,400 767,250 714,375 207,900 (31,185) 943,965 (144,180) 3,140,595 Ending retained earnings Balance sheet Assets Cash Accounts receivable Inventory Equity investment 275,355 382,635 633,600 344,520 960,300 442,530 1,632,690 Property, plant and equipment (PPE), net Patent Goodwil 3,629,340 818,730 7,131,285 1988,415 Liabilities and stockholders equity Accounts payable Accrued liabilities Long term liabilities Common stock APIC Retainedearnings 362,340 430,650 141570 185,130 495,000 99,000 2,631600123,750 3,140,595 943,965 7,131,285 1988,415 566,100

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Assume that a parent company acquires its subsidiary on 1/1/xx, by exchanging 41,500 shares of its $1 par value common stock, with a market value

Assume that a parent company acquires its subsidiary on 1/1/xx, by exchanging 41,500 shares of its $1 par value common stock, with a market value on acquisition date of $36 per share, for all of the outstanding voting shares of the subsidiary. You have been charged with preparing the consolidation of these two entities at 12/31/xx.

On acquisition date (1/1/xx), all of the subsidiarys assets and liabilities had fair values equaling their book values except PPE assets are undervalued by $81,000 (depreciation =$5,400 per year), the subsidiary has an unrecorded patent with a fair value of $261,000 (amortization = $32,625 per year) and the parent records $162,000 of goodwill in the transaction.

Submission Requirements:

Using the ACT470_Mod02-Option02.xlsx Excel spreadsheet in the Module 2 folder:

Prepare the consolidated balance sheet at 12/31/xx 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 a [C], [E] or [A] or [D] 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 [C], [E], [A] and [D]cell entries in different shades.

ACT470-Module 2-Option 2 Consolidation Entries Subsidiar 4,950,000 1485,000 594,000 Parent Cr Consolidated Income Statement Sales Cost of goods sold Gross proft Equity income Operatingexpenses Net income (3.465,000) 891,000) 1,485,000 169,875 (940,500) 386,100) 714,375 207,900 Statement of retained earnings BOY retained earnings Net income 2,570,400 767,250 714,375 207,900 (31,185) 943,965 (144,180) 3,140,595 Ending retained earnings Balance sheet: Assets Cash Accounts receivable Inventory Equity investment 275,355 382,635 633,600 344,520 960,300 442,530 1,632,690 Property, plant and equipment (PPE), net Patent Goodwil 3,629,340 818,730 7,131,285 1988,415 Liabilities and stockholders equity Accounts payable Accrued liabilities Long-term liabilities Common stock APIC Retainedearnings 362,340 430,650 141570 185,130 495,000 99,000 2,631600123,750 3,140,595 943,965 7,131,285 1988,415 566,100