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Posted on Jul 23, 2024

Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2018, for $1,200,000.

Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2018, for $1,200,000. The purchase price was $650,000 in excess of the subsidiary's $550,000 book value of Stockholders' Equity on the acquisition date. Of this excess purchase price, $250,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $400,000 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $280,000. The parent uses the cost method of pre-consolidation Equity investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2019, are as follows: Parent Subsidiary Parent Subsidiary Income statement Balance sheet 55.000.000 $1.200.000 e Cost of goods sold 2.000.000 (700.000 Cash Gross profit 2,000,000 500,000 Accounts receivable Equity Income 40,000 Inventory Operating expenses (1.500.000 (400.000 Equity Investment Net income 5540.000 $100.000 property, plant equipment Statement of retained earnings BOY retained earnings 1.500.000 600.000 Liabilities and stockholders' equity Net income 540.000 100,000 Accounts payable Dividends (200,000) (40.000) Accrued liabilities Ending retained earnings 51.140.000 5660.000 Long termes Common stock APIC Recained earning $800.000 $150.000 1.000.000 340.000 1.600.000 500.000 1.200.000 3.000.000 900.000 57.600.000 51.890.000 5700.000 5140 000 900.000 220.000 2.500.000 600.000 500.000 120.000 1.160.000 150.000 1.340.000 660.000 57.600.000 51.090.000 At what amount will the following accounts appear on the consolidated financial statements? Do not use negative signs with any of your answers. Sales $6,200,000 Investment Income SO Operating Expenses $1.925,000 Inventories $2,100,000 Equity Investment PP&E $4,100,000 Goodwill $400,000 Common Stock $500,000 Retained Earnings How to find out the retained earnings? Need help asap I tried the answer $2,500,000 and $1,840,000 but both are incorrect SO Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2018, for $1,200,000. The purchase price was $650,000 in excess of the subsidiary's $550,000 book value of Stockholders' Equity on the acquisition date. Of this excess purchase price, $250,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $400,000 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $280,000. The parent uses the cost method of pre-consolidation Equity investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2019, are as follows: Parent Subsidiary Parent Subsidiary Income statement Balance sheet 55.000.000 $1.200.000 e Cost of goods sold 2.000.000 (700.000 Cash Gross profit 2,000,000 500,000 Accounts receivable Equity Income 40,000 Inventory Operating expenses (1.500.000 (400.000 Equity Investment Net income 5540.000 $100.000 property, plant equipment Statement of retained earnings BOY retained earnings 1.500.000 600.000 Liabilities and stockholders' equity Net income 540.000 100,000 Accounts payable Dividends (200,000) (40.000) Accrued liabilities Ending retained earnings 51.140.000 5660.000 Long termes Common stock APIC Recained earning $800.000 $150.000 1.000.000 340.000 1.600.000 500.000 1.200.000 3.000.000 900.000 57.600.000 51.890.000 5700.000 5140 000 900.000 220.000 2.500.000 600.000 500.000 120.000 1.160.000 150.000 1.340.000 660.000 57.600.000 51.090.000 At what amount will the following accounts appear on the consolidated financial statements? Do not use negative signs with any of your answers. Sales $6,200,000 Investment Income SO Operating Expenses $1.925,000 Inventories $2,100,000 Equity Investment PP&E $4,100,000 Goodwill $400,000 Common Stock $500,000 Retained Earnings How to find out the retained earnings? Need help asap I tried the answer $2,500,000 and $1,840,000 but both are incorrect SO