Basic

Problem 1 Parent and Co. acquired an 80% interest in Sub \& Co. for $600,000 in cash on January 1, 2019. Parent \& Co. uses the simple equity method: The FV of the net assets of Sub total 590,000, with the excess FV over book value being an increase in the value of the depreciable assets. The depreciable assets have a 5 year remaining life. The following trial balances of the 2 companies are prepared on December 31, 2019: 1 Prepare a determination and distribution of excess schedule for the investment 2 Prepare all the elimination and adjustment journal entries that would be made at December 31, 2019