Determining ending balances of accounts on the consolidated balance sheet Assume that the parent company acquires its subsidiary by exchanging 82,500 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 $750,000, an unrecorded License Agreement that the parent values at $375,000, and an unrecorded Customer List owned by the subsidiary that the parent values at $150,000. 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? Parent Subsidiary Balance Sheet Assets Cash Accounts receivable Inventory Equity Investment Property, plant and equipment (PPE),net $1,365,750 $302 400 576,000 626,400 873,000 804,600 3,300,000 4,199 400 1,488,600 $10,314,150 $3,222,000 Liabilities and stockholders' equity Accounts payable Accrued liabilities Long-term liabilities Common stock APIC $282.150 $ $190,500 331,200 331,500 1,500,000 900,000 330,000 180,000 5,610,000 225,000 2,260,800 1,395,000 $10,314,150 $3,222.000 Retained earnings 1. Accounts Receivable $ 1,202,400 2. Equity Investment $ 0 3. PPE, net $ 6.438.000 4. Goodwill $ 225,000 5. Common Stock $ 330,000 6. APIC $ 5,610,000 7. Retained Earings $ 2.260,800 b. What intangible assets will be reported on the consolidated balance sheet and at what amounts? License Agreement $ 375,000 Customer List $ 0 Goodwill $ 0 Previous Save Answers Next >