Assume that the parent company acquires its subsidiary in a nontaxable transaction by exchanging 96,000 shares of its $5 par value common stock, with a fair value on the acquisition date of $42 per share, for all of the outstanding voting shares of the investee. 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 PP&E assets that are undervalued by $760,000, an unrecorded Customer List with a fair value of $250,000, and an unrecorded Brand Name asset valued at $570,000. 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 36%. Required: 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 subsidiary, prepare the consolidation spreadsheet. Cash Accounts Receivable Inventory Equity Investment Property, plant and equipment (net) Subsidiary $ 149,760 1,002,240 1,287,360 Parent $ 939,960 460,800 1,200,000 4,032,000 13,568,000 $20,200,760 $ 225,720 264,960 300,000 2,100,000 816,000 6,240,000 10,254,080 $20.200.760 2,381,760 $4,821,120 $ 182,880 318,240 Accounts payable Accrued Liabilities Deferred tax liability Long-Term Liabilities Common Stock Additional paid-in capital Retained earnings 1,440,000 288,000 360,000 2.232,000 $4,821,120