Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume that a parent company acquires an 80% interest in its subsidiary for a purchase price of $1,862,400. 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 the parent believes is worth $150,000 more than its book value, an: unrecorded Patent that the parent valued at $300,000, and Goodwill of $450,000, 80% of which is allocated to the parent. The parent and the subsidiary report the balance sheets on the acquisition date in b. below: a. Prepare the consolidation entries on the acquisition date. Consolidation Worksheet Description [E] Common stock APIC Debit Credit 0 0 0 0 0 0 Equity investment 0 0 0 0 [A] PPE, net 0 0 Patent 0 0 0 0 Equity investment 0 0 0 0 b. Prepare the consolidation spreadsheet on the acquisition date. Elimination Entries Parent Subsidiary Dr Cr Consolidated Cash $1,381,131 $322,728 $ 0 Accounts receivable 1,088,640 496,944 0 Inventory Equity investment 1,649,970 638,316 1,862,400 0 0 [E] 0 0 [A] Patent Goodwill PPE, net 7,936,866 1,180,956 [A] WWW [A] [A] ooo 0 0 0 0 0 0 Total Assets $13,919,007 $2,638,944 $ 0 Current liabilities $1,222,169 $496,944 $ 0 Long-term liabilities Common stock APIC 6,000,000 714,000 1,390,568 1,033,358 0 142,800 [E] 178,500 [E] 0 0 0 0 Noncontrolling interest 0 [E] 0 0 [A] Retained earnings 4,272,912 1,106,700 [E] 0 0 Total Liabilities and Equity $13,919,007 $2,638,944 0 0 $ 0 Check