Consolidation spreadsheet for continuous sale of inventory- Equity method

Assume that a parent company acquired a subsidiary on January 1, 2010. The purchase price was $500,000 million in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following AAP assets:

Original Original Useful AAP Asset Amount Life (years) Property, plant and equipment (PPE), net $100,000 20 Customer list 185,000 10 Royalty agreement 115,000 10 Goodwill 100,000 indefinite $500,000\fNet income of subsidiary Plus: Prior year intercompany gross profit Less: Current year intercompany gross profit AAP depreciation Income (loss) from subsidiaryCommon stock APIC Retained earnings BOY unamortized AAP BOY deferred profit Income (loss) from subsidiary Dividends Equity investmentConsolidation Worksheet Description Debit Credit [C] Dividends [E] Common stock APIC [A] PPE net Customer list Royalty agreement [D] PPE net Customer list [lcogs] To recognize deferred profit on prior year's sale. [Isales] [lcogs] To defer gross profit on the intercompany sale.