Consolidation at date of acquisition (purchase price equals book value) A parent company acquires its subsidiary by exchanging 37,500 shares of its Common Stock, with a market value on the acquisition date of $25 per share, for all of the outstanding voting shares of the investee. a. What is the total fair value of the subsidiary on the acquisition date? $ 1,125,000 b. Given the balance sheets of the parent and subsidiary in c. below, prepare the consolidation entry or entries on the date of acquisition. Consolidation WorkSheet Description [E] Common stock APIC Retained earnings Equity investment Debit Credit 100,000 125,000 900,000 x 1,125,000 x c. Prepare the consolidated balance sheet on the date of acquisition. Balance Sheet Assets Cash Accounts receivable Inventory Equity investment Property, plant and equipment (PPE), net Liabilities and stockholders' equity Accounts payable Accrued liabilities Elimination Entries Parent Subsidiary Dr Cr Consolidated $405,000 $226,000 1,280,000 348,000 631,000 1,628,000 1,940,000 937,500 9,332,000 447,000 2,387,000 0 1,125,000 x 0 764,500 10,284,000 x $13,894,500 $1,910,500 $ 14,930,000 x $627,000 $127,000 736,000 221,000 $ 754,000 957,000