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 $2,483,200. 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 $200,000 more than its book value, an: unrecorded Patent that the parent valued at $400,000, and Goodwill of $600,000, 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 Debit Credit [E] Common stock APIC Equity investment [A] PPE, net Patent Equity investmentElimination Entries Parent Subsidiary Dr Cr Consolidated Cash $1,841,506 $430,304 $ Accounts receivable 1,451,520 662,592 Inventory 2, 199,960 851,088 Equity investment 2,483,200 [E] [A] Patent [A] Goodwill [A] PPE, net 10,582,488 1,574,608 [A] Total Assets $18,558,674 $3,518,592 Current liabilities $1,629,558 $662,592 Long-term liabilities 8,000,000 952,000 Common stock 1,854,090 190,400 [E] APIC 1,377,810 238,000 [E] Noncontrolling interest [E] [A] Retained earnings 5,697,216 1,475,600 [E] Total Liabilities and Equity $18,558,674 $3,518,592