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Assume that the parent company acquires its subsidiary in a nontaxable transaction by exchanging 60,000 shares of its ( $ 2 ) par value Common

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Assume that the parent company acquires its subsidiary in a nontaxable\" transaction by exchanging 60,000 shares of its \\( \\$ 2 \\) par value Common Stock, with a fair value on the acquisition date of \\( \\$ 10 \\) per share, for all of the outstanding voting shares of the imvestee, In its analysis of the investee company, the fair value of each of the subsidiary's assets and liabilities equals their respective book values except for property, plant and equipment (PPE) assets that are undervalued by \\( \\$ 40,000 \\); an unrecorded Customer List with a fair value of \\( \\$ 64,000 \\), and an unrecorded Brand Name asset valued at \\( \\$ 96,000 \\), And, finally. assume that the tax bases of the subsidiary's pre-acquisition identifiable net assets equal their book values. The parent company's effective tax rate is \22. a. Prepare the journal entry that the parent makes to record the acquisition. b. Given the following acquisition-date balance sheets for the parent and its subsidiary, prepare the consolidation spreadsheet. Assume that the parent company acquires its subsidiary in a nontaxable\" transaction by exchanging 60,000 shares of its \\( \\$ 2 \\) par value Common Stock, with a fair value on the acquisition date of \\( \\$ 10 \\) per share, for all of the outstanding voting shares of the imvestee, In its analysis of the investee company, the fair value of each of the subsidiary's assets and liabilities equals their respective book values except for property, plant and equipment (PPE) assets that are undervalued by \\( \\$ 40,000 \\); an unrecorded Customer List with a fair value of \\( \\$ 64,000 \\), and an unrecorded Brand Name asset valued at \\( \\$ 96,000 \\), And, finally. assume that the tax bases of the subsidiary's pre-acquisition identifiable net assets equal their book values. The parent company's effective tax rate is \22. a. Prepare the journal entry that the parent makes to record the acquisition. b. Given the following acquisition-date balance sheets for the parent and its subsidiary, prepare the consolidation spreadsheet

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