Determining ending balances of accounts on the consolidated balance sheet Assume that the parent company acquires its subsidiary by exchanging 27,500 shares of its Common Stock, with a market value on the acquisition date of $40 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary's assets and liabilities at an amount equaling their book values except for a building that it feels is undervalued by $250,000, an unrecorded License Agreement that the parent values at $125,000, and an unrecorded Customer List owned by the subsidiary that the parent values at $50,000. Any further discrepancy between the purchase price and the book value of the subsidiary's Stockholders' Equity is attributed to expected synergies to be realized by the consolidated company as a result of the acquisition.

a. Given the following acquisition-date balance sheets of the parent and subsidiary, at what amounts will each of the following be reported on the consolidated balance sheet?

Balance Sheet	Parent	Subsidiary
Assets
Cash	$455,250	$100,800
Accounts receivable	192,000	208,800
Inventory	291,000	268,200
Equity investment	1,100,000
Property, plant and equipment (PPE), net	1,399,800	496,200
	$3,438,050	$1,074,000
Liabilities and stockholders' equity
Accounts payable	$94,050	$63,500
Accrued liabilities	110,400	110,500
Long-term liabilities	500,000	300,000
Common stock	110,000	60,000
APIC	1,870,000	75,000
Retained earnings	753,600	465,000
	$3,438,050	$1,074,000

1.	Accounts Receivable	Answer
2.	Equity Investment	Answer
3.	PPE, net	Answer
4.	Goodwill	Answer
5.	Common Stock	Answer
6.	APIC	Answer
7.	Retained Earnings	Answer

b. What intangible assets will be reported on the consolidated balance sheet and at what amounts?

License Agreement	Answer
Customer List	Answer
Goodwill	Answer