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 Support Equity investment [A] PPE, net Patent Equity investment Cr Consolidated b. Prepare the consolidation spreadsheet on the acquisition date. Elimination Entries Parent Subsidiary Dr Cash $460,378 $107,576 Accounts receivable 362,880 165,648 Inventory 549,990 212,772 Equity investment 620,800 [A] Support Patent Goodwill PPE, net Total Assets Current liabilities Long-term liabilities Common stock APIC Noncontrolling interest 2,645,622 $4,639,670 $407,390 2,000,000 463,523 344,453 393,652 [A] $879,648 $165,648 238,000 47,600 [E] 59,500 [E] Retained earnings 1,424,304 Total Liabilities and Equity $4,639,670 368,900 [E] $879,648