Consolidation subsequent to date of acquisition--Equity method with noncontrolling interest and AAP Assume, on January 1, 2015, a parent company acquired a 90% interest in its subsidiary. The total fair value of the controlling and noncontrolling interest was $480,000 over the book value of the subsidiary's Stockholders Equilty on the acquisition date. The parent assigned the excess to the following (A) assets: Origal LALA Amount sculite Property plant and equipment $ 160,000 10 years Customer ist 96.000 Syears Goodwin 224.000 indefinite $ 480,000 90% of the Goodwill is allocated to the parent. The parent and the subsidiary report the following pre-consolidation financial statements at December Parent Subury 31, 2019 Parent Income statement Sales $5,760.000 Cost of goods sold 14.000.000 Gross profit 1,760,000 Equity income 112.30 Operating expenses (1.120.000 Net income 752,320 Statement of retained earnings Beginning retained earnings 1.401,280 Net income 752,320 Dividends [160,000 Ending retained earnings 51.993.600 Subsidiary Balance sheet: 1.520,000 Assets 1960,000) Cash 560.000 Accounts receivable Inventory (400.000 Equity Investment 160,000 Property, plant and equipment, net $ 600.000 $ 80.000 752.000 200,000 960,000 440,000 921,000 2.240,000 720.000 $5.273.600 $ 1.440.000 400.000 abilities and stockholders' equity 160.000 Accrued abilities (40.000) Long term labies $520.000 Common stock APIC Retained earnings 800.000 320.000 1,600.000 400.000 160.000 BO DOO 720.000 120.000 1,991600 $20.000 55.273,600 $1.440,000 a. Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP), the controlling interest AAP and the noncontrolling interest AAP O Unamor Unamart Unamon Unamort AAP 2015 AAP Unamont Unament 2016 AAP 100 AP 2017 AAP AP 2019 01/15/15 AAP Amort 12/31/15 Amort 12/11/16 Amort 12/31/17 PPE, net Amort Amort $ 160,000 $ O$ OS 0$ 0$ OS 05 OS OS O Customer ist 96.000 0 0 0 0 0 0 O Goodwill 224.000 0 0 0 0 0 0 O $430,000 $ 0 $ 0$ OS Os OS 0$ 05 OS OS Parent PPE.net $ 0$ 0 $ OS 05 05 OS 0 Customer list 0 0 0 0 0 0 0 0 O Goodwin 0 0 0 0 0 0 0 0 0 0 OS OS 0$ OS 05 Os 0$ Os 05 05 Subsidiary inci PPE.net $ 0$ Os OS 0$ OS OS OS Customer list 0 0 0 0 0 0 0 0 Goodwill 0 0 0 0 O 0 0 O 0 $ 0 Os 0$ 0$ OS OS OS b. Calculate and organize the profits and losses on intercompany transactions and balances. (No intercompany transactions) C. Compute the pre-consolidation Equity Investment account beginning and ending balances starting with the stockholders' equity of the subsidiary. Equity investment account at 1/1/19 pbook value of subsidiary's net assets 5 0 Unamortired AAP 0 0 Ooolo Equity investment account at 12/31/19 pit book value of subsidiary's net assets 5 Unamortized AAP 0 0 d. Reconstruct the activity in the parent's pre-consolidation Equity Investment T-account for the year of consolidation 0 . e Independently compute the owners' equity attributable to the noncontrolling interest beginning and ending balances starting with the owners equity of the subsidiary O Root of subdarytas 0 0 1 Independently calculate consolidated net income, controlling interest net income and noncontrolling interest net income. Note:Use a negative sign with your answer to indicate a reduction to net income. Parandalon net income Suby's standalone income 100% Amortation O Content income O Parents and tone net income pl of subsidiary's standalone net income o portation Consolidatedret income attributable to the controlling interest 1 of subsidiary's standalone et income $ ON AP ametition Consolidated net income attributable to the noncontro 0 g. Complete the complete the consolidation worksheet Note: Use negative signs with your answers in the Consolidated column when appropriate (Cost of goods sold, Operating expenses and Dividends. Comments Parent Subulary 1 De Consolidated Income Statement Sales 15.760.000 51.520.000 0 Cost of Goods sold 1.000.000 1960,0001 0 Gross profe 1,760,000 560.000 0 Income (los) from subsidiary 112320 0 0 Operating expenses 11,120.000 1400.000 0 Net Income 5752,320 0 Consolidated Nl atrib to NG 0 Comoldated Narbo 5 0 Statement of Ret Earnings BOY retired earnings 51,401.280 1400,000 O $ 0 Net income 752320 160.000 0 Dividends (160.000 140.000 00 EOT retained earnings $1,993,600 9 1520,000 Balance Sheet Cash 1400.000 580.000 Accounts receivable 75.2.000 200,000 960,000 440 000 Invertory D Equity investment 921600 OC 0 DE O AL PPL net 2,240,000 720,000 OD 0 Customer Ust OD 0 Goodwill 0 0 15.273.600 51.440,000 5 0 Current liabilities $800,000 $320.000 0 1400.000 Long term obties 400 g 0 Common stock 160.000 0 APIC 120.000 D Retained earnings 1.993.600 09 Norcontrolling interest O DE OA 15,271,600 51.440.000 5 0 333 Consolidation subsequent to date of acquisition--Equity method with noncontrolling interest and AAP Assume, on January 1, 2015, a parent company acquired a 90% interest in its subsidiary. The total fair value of the controlling and noncontrolling interest was $480,000 over the book value of the subsidiary's Stockholders Equilty on the acquisition date. The parent assigned the excess to the following (A) assets: Origal LALA Amount sculite Property plant and equipment $ 160,000 10 years Customer ist 96.000 Syears Goodwin 224.000 indefinite $ 480,000 90% of the Goodwill is allocated to the parent. The parent and the subsidiary report the following pre-consolidation financial statements at December Parent Subury 31, 2019 Parent Income statement Sales $5,760.000 Cost of goods sold 14.000.000 Gross profit 1,760,000 Equity income 112.30 Operating expenses (1.120.000 Net income 752,320 Statement of retained earnings Beginning retained earnings 1.401,280 Net income 752,320 Dividends [160,000 Ending retained earnings 51.993.600 Subsidiary Balance sheet: 1.520,000 Assets 1960,000) Cash 560.000 Accounts receivable Inventory (400.000 Equity Investment 160,000 Property, plant and equipment, net $ 600.000 $ 80.000 752.000 200,000 960,000 440,000 921,000 2.240,000 720.000 $5.273.600 $ 1.440.000 400.000 abilities and stockholders' equity 160.000 Accrued abilities (40.000) Long term labies $520.000 Common stock APIC Retained earnings 800.000 320.000 1,600.000 400.000 160.000 BO DOO 720.000 120.000 1,991600 $20.000 55.273,600 $1.440,000 a. Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP), the controlling interest AAP and the noncontrolling interest AAP O Unamor Unamart Unamon Unamort AAP 2015 AAP Unamont Unament 2016 AAP 100 AP 2017 AAP AP 2019 01/15/15 AAP Amort 12/31/15 Amort 12/11/16 Amort 12/31/17 PPE, net Amort Amort $ 160,000 $ O$ OS 0$ 0$ OS 05 OS OS O Customer ist 96.000 0 0 0 0 0 0 O Goodwill 224.000 0 0 0 0 0 0 O $430,000 $ 0 $ 0$ OS Os OS 0$ 05 OS OS Parent PPE.net $ 0$ 0 $ OS 05 05 OS 0 Customer list 0 0 0 0 0 0 0 0 O Goodwin 0 0 0 0 0 0 0 0 0 0 OS OS 0$ OS 05 Os 0$ Os 05 05 Subsidiary inci PPE.net $ 0$ Os OS 0$ OS OS OS Customer list 0 0 0 0 0 0 0 0 Goodwill 0 0 0 0 O 0 0 O 0 $ 0 Os 0$ 0$ OS OS OS b. Calculate and organize the profits and losses on intercompany transactions and balances. (No intercompany transactions) C. Compute the pre-consolidation Equity Investment account beginning and ending balances starting with the stockholders' equity of the subsidiary. Equity investment account at 1/1/19 pbook value of subsidiary's net assets 5 0 Unamortired AAP 0 0 Ooolo Equity investment account at 12/31/19 pit book value of subsidiary's net assets 5 Unamortized AAP 0 0 d. Reconstruct the activity in the parent's pre-consolidation Equity Investment T-account for the year of consolidation 0 . e Independently compute the owners' equity attributable to the noncontrolling interest beginning and ending balances starting with the owners equity of the subsidiary O Root of subdarytas 0 0 1 Independently calculate consolidated net income, controlling interest net income and noncontrolling interest net income. Note:Use a negative sign with your answer to indicate a reduction to net income. Parandalon net income Suby's standalone income 100% Amortation O Content income O Parents and tone net income pl of subsidiary's standalone net income o portation Consolidatedret income attributable to the controlling interest 1 of subsidiary's standalone et income $ ON AP ametition Consolidated net income attributable to the noncontro 0 g. Complete the complete the consolidation worksheet Note: Use negative signs with your answers in the Consolidated column when appropriate (Cost of goods sold, Operating expenses and Dividends. Comments Parent Subulary 1 De Consolidated Income Statement Sales 15.760.000 51.520.000 0 Cost of Goods sold 1.000.000 1960,0001 0 Gross profe 1,760,000 560.000 0 Income (los) from subsidiary 112320 0 0 Operating expenses 11,120.000 1400.000 0 Net Income 5752,320 0 Consolidated Nl atrib to NG 0 Comoldated Narbo 5 0 Statement of Ret Earnings BOY retired earnings 51,401.280 1400,000 O $ 0 Net income 752320 160.000 0 Dividends (160.000 140.000 00 EOT retained earnings $1,993,600 9 1520,000 Balance Sheet Cash 1400.000 580.000 Accounts receivable 75.2.000 200,000 960,000 440 000 Invertory D Equity investment 921600 OC 0 DE O AL PPL net 2,240,000 720,000 OD 0 Customer Ust OD 0 Goodwill 0 0 15.273.600 51.440,000 5 0 Current liabilities $800,000 $320.000 0 1400.000 Long term obties 400 g 0 Common stock 160.000 0 APIC 120.000 D Retained earnings 1.993.600 09 Norcontrolling interest O DE OA 15,271,600 51.440.000 5 0 333