Assume that on 1/1/X0, a parent company acquires a 70% interest in its subsidiary for a price at $480,000 over book value.

The excess is assigned as follows:

Asset Fair Value Useful Life

Patent $320,000 8 years

Goodwill 160,000 Indefinite

70% of the goodwill is allocated to the parent.

Below are the pre-consolidation financial statements for both the parent and the subsidiary.

Requirements:

• Prepare the consolidated financial statements at 12/31/X6 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], [A], [D] or [I]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], [D] or [I]entry cells in different shades.