Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume a parent company acquires a 75% interest in its subsidiary for a purchase price of $924,000. The excess of the total fair value of the controlling and noncontrolling Interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building in PPE, net) that is worth $88,000 more than its book value, an unrecorded patent with a fair value of $144,000, and Goodwill of $248,000. There is no control premium, so goodwill is assigned proportionally to the controlling and noncontrolling interests. The parent and the subsidiary report the following pre-consolidation balance sheets on the acquisition date: Parent Subsidiary Parent Subsidiary Cash 5720,000 $160,000 Current liabilities 640,000 5252.000 Accounts receivable 625,600 264.000 Long-term liabilities 2.400,000 400.000 Inventory 880,000 340.000 Common stock 720,000 72.000 Equity investment 924,000 APIC 560,000 90.000 Property, plant and equipment(PPE), net 3.200,000 640,000 Retained earnings 2029.600 584,000 Total assets 56,349.600 1.404,000 Total liabilities and equity 56.349,600 $1,404.000 a. Prepare the consolidation entries on the acquisition date Consolidation Worksheet Description Debit Credit [E] common stock APIC Equity investment TAJ PPE.net Patent Equity investment b. Prepare the consolidation spreadsheet on the acquisition date. Elimination Entries Parent Subsidiary Dr Cr Cash $720,000 $160,000 Accounts receivable 625,600 264,000 Inventory 880,000 340,000 Equity investment 924,000 Consolidated $ [E] [A] PPE, net Patent Goodwill 3,200,000 640,000 [A] [A] [A] $6,349,600 $1,404,000 $640,000 $252,000 2,400,000 400,000 720,000 72,000 [E] 560,000 96,000 [E] Total Assets Current liabilities Long-term liabilities Common stock APIC Noncontrolling interest $ [E] [A] Retained earnings 2,029,600 584,000 [E] Total Liabilities and Equity 56,349,600 $1,404,000