Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2015, for $1,936,000. The purchase price was $816,200 in excess of the subsidiary's $1,119,800 book value of Stockholders' Equity on the acquisition date. Of this excess purchase price, $352,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $464,200 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $847,550. The parent uses the cast method of pre-consolidation Equity investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2016, are as follows: Parent Subsidiary Parent Subsidiary Income statement Balance sheet Sales $8,318,750 $1,815,000 Assets Cost of goods sold (5.999,500) (1,089,000) Cash $1,567,280 $468,600 Gross profit 2,329,250 726,000 Accounts receivable 2,462.000 421.300 Equity income 37.400 Inventory 1.226.850 540,650 Operating expenses (1 247,840) 1471.900) Equity Investment 1,936.000 Net income 51,118 810 S254,100 Property, plant & equioment 17,189.920 1,000,450 Statement of retained earnings S25,382.950 $2.431.000 BOY retained earnings 5,801,070 937,750 Liabilities and stockholders' equity Net income 1,118810 254,100 Accounts payable $1,217.920 $173,020 Dividends (262,570) (37.400) Accrued liabilities 1,447,270 226,270 Ending retained earnings $6,657,210 51.154,450 Long-term liabilities 10.587.59 605,000 Common stock 775,060 121,000 APIC 5,697,890 151,250 Rerained earnings 5657.310 1.154450 $26,382,950 $2,431.000 3 At what amount will the following accounts appear on the consolidated financial statements? Do not use negative signs with any of your answers. a Sales S 10.133,750 b. Investment income S c. Operating expenses 1,754,940 d. Inventaries S 3,767,500 e Equity Investment s f. Property, plant & equipment, nec s 18,471,970 2. Goodwill S 464,200 h. Common stock s 775,060 i Retained earnings S 6,657,310 x Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2015, for $1,936,000. The purchase price was $816,200 in excess of the subsidiary's $1,119,800 book value of Stockholders' Equity on the acquisition date. Of this excess purchase price, $352,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $464,200 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $847,550. The parent uses the cast method of pre-consolidation Equity investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2016, are as follows: Parent Subsidiary Parent Subsidiary Income statement Balance sheet Sales $8,318,750 $1,815,000 Assets Cost of goods sold (5.999,500) (1,089,000) Cash $1,567,280 $468,600 Gross profit 2,329,250 726,000 Accounts receivable 2,462.000 421.300 Equity income 37.400 Inventory 1.226.850 540,650 Operating expenses (1 247,840) 1471.900) Equity Investment 1,936.000 Net income 51,118 810 S254,100 Property, plant & equioment 17,189.920 1,000,450 Statement of retained earnings S25,382.950 $2.431.000 BOY retained earnings 5,801,070 937,750 Liabilities and stockholders' equity Net income 1,118810 254,100 Accounts payable $1,217.920 $173,020 Dividends (262,570) (37.400) Accrued liabilities 1,447,270 226,270 Ending retained earnings $6,657,210 51.154,450 Long-term liabilities 10.587.59 605,000 Common stock 775,060 121,000 APIC 5,697,890 151,250 Rerained earnings 5657.310 1.154450 $26,382,950 $2,431.000 3 At what amount will the following accounts appear on the consolidated financial statements? Do not use negative signs with any of your answers. a Sales S 10.133,750 b. Investment income S c. Operating expenses 1,754,940 d. Inventaries S 3,767,500 e Equity Investment s f. Property, plant & equipment, nec s 18,471,970 2. Goodwill S 464,200 h. Common stock s 775,060 i Retained earnings S 6,657,310 x