Assume that the parent company acquires its subsidiary by exchanging 75,400 shares of its Common Stock, with a fair value on the acquisition date of $30 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiarys assets and liabilities at an amount equaling their book values except for a building that is undervalued by $480,000, an unrecorded License Agreement with a fair value of $230,000, and an unrecorded Customer List owned by the subsidiary with a fair value of $120,000. Any further discrepancy between the purchase price and the book value of the subsidiarys Stockholders Equity is attributed to expected synergies to be realized by the consolidated company as a result of the acquisition.

a. Given the following acquisition-date balance sheets of the parent and subsidiary, at what amounts will each of the following be reported on the consolidated balance sheet? (see table numbered 1-7 to answer)

Balance Sheet	Parent	Subsidiary
Assets
Cash	$728,400	$181,440
Accounts receivable	307,200	375,840
Inventory	465,600	482,760
Equity investment	2,262,000
Property, plant and equipment (PPE), net	2,000,000	893,160
	$5,763,200	$1,933,200
Liabilities and stockholders equity
Accounts payable	$150,480	$114,300
Accrued liabilities	176,640	198,900
Long-term liabilities	1,062,320	540,000
Common stock	176,000	108,000
APIC	2,992,000	135,000
Retained earnings	1,205,760	837,000
	$5,763,200	$1,933,200

1.	Accounts Receivable	$Answer
2.	Equity Investment	$Answer
3.	PPE, net	$Answer
4.	Goodwill	$Answer
5.	Common Stock	$Answer
6.	APIC	$Answer
7.	Retained Earnings	$Answer

b. What intangible assets will be reported on the consolidated balance sheet and at what amounts?

License Agreement	$Answer
Customer List	$Answer
Goodwill	$Answer