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 $620,800. 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 $50,000 more than its book value, an: unrecorded Patent that the parent valued at $100,000, and Goodwill of $150,000, 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. Credit Consolidation Worksheet Description Debit [E] Common stock APIC A 0 0 0 Equity investment 0 0 [A] PPE, net 0 Patent 0 - 0 Equity investment 0 0 Consolidated $ 0 0 0 0 0 0 b. Prepare the consolidation spreadsheet on the acquisition date. Elimination Entries Parent Subsidiary Dr Cr Cash $460,378 $107,576 Accounts receivable 362,880 165,648 Inventory 549,990 212,772 Equity investment 620,800 0 [E] O [A] Patent [A] 0 Goodwill [A] 0 PPE, net 2,645,622 393,652 [A] 0 Total Assets $4,639,670 $879,648 Current liabilities $407,390 $165,648 Long-term liabilities 2,000,000 238,000 Common stock 463,523 47,600 [E] 0 APIC 344,453 59,500 [E] 0 Noncontrolling interest 0 [E] O [A] Retained earnings 1,424,304 368,900 [E] 0 Total Liabilities and Equity $4,639,670 $879,648 0 0 0 0 $ $ 0 0 0 0 0 0 O $ 0