Foxx Corporation acquired all of Greenburg Companys outstanding stock on January 1, 2016, for $911,000 cash. Greenburgs accounting records showed net assets on that date of $688,000, although equipment with a 10-year life was undervalued on the records by $175,000. Any recognized goodwill is considered to have an indefinite life. Greenburg reports net income in 2016 of $105,500 and $113,000 in 2017. The subsidiary declared dividends of $20,000 in each of these two years. Account balances for the year ending December 31, 2018, follow. Credit balances are indicated by parentheses. Foxx Greenburg Revenues $ (1,136,000 ) $ (840,000 ) Cost of goods sold 142,000 210,000 Depreciation expense 338,000 383,000 Investment income (20,000 ) 0 Net income $ (676,000 ) $ (247,000 ) Retained earnings, 1/1/18 $ (1,214,000 ) $ (412,000 ) Net income (676,000 ) (247,000 ) Dividends declared 120,000 20,000 Retained earnings, 12/31/18 $ (1,770,000 ) $ (639,000 ) Current assets $ 309,000 $ 188,000 Investment in subsidiary 911,000 0 Equipment (net) 910,000 726,000 Buildings (net) 998,000 588,000 Land 696,000 144,000 Total assets $ 3,824,000 $ 1,646,000 Liabilities $ (1,154,000 ) $ (707,000 ) Common stock (900,000 ) (300,000 ) Retained earnings (1,770,000 ) (639,000 ) Total liabilities and equity $ (3,824,000 ) $ (1,646,000 ) Determine the December 31, 2018, consolidated balance for each of the following accounts: Depreciation Expense Buildings Dividends Declared Goodwill Revenues Common Stock Equipment How does the parent's choice of an accounting method for its investment affect the balances computed in requirement (a)? Which method of accounting for this subsidiary is the parent actually using for internal reporting purposes? Determine parent's investment income for 2018 under partial equity method and equity method. What would be Foxxs balance for retained earnings as of January 1, 2018, if each of the following methods had been in use? Initial value method. Partial equity method. Equity method.

Problem 3-24 (LO 3-2, 3-3, 3-4) Faxx Carparation acquired all of Greenburg Company's outstanding stock on January 1, 2016, for $91,000 cesh. Greenburg's accounting records showed net sssets on that dete of $688,000, although equlpment with a 10-year life was undervalued on the records by $175,000. Any recognized goodwill is considered to have san indefinite life Greenburq reports net Income in 2016 of $105,500 and $113,000 In 2017. The subsidiary declared dividends of $20,000 In esch of these two yeara Account balances for the year ending December 31 2018, follow. Credit balances are Indicated by parenthese Grenburg $ (848,8e0) 218,ae 383.000 Fax Revnues $(1,136,8e0) 142,80 338,800 (20.000) Cost of goods sold Depreciat Lon expense Investment income (676,8e0) (247,a0) Not incone Rtained earnings, 1/1/18 Nt incon S(1,214,0) (676,8e0) 128,800 $(1,770,000 S (412,00y (247,800) Dividends declared s(639,800) Rtained earnings, 12/31/18 Current assets 389,800 911,000 918,800 98,aea 696.800 188, Investmont in subsidiary Equipment (net) Buildings (net) Land 726,aee 588,aee 144,000 3,824,8ee 1,646,8 Total assets $ (787,800) (388, aea) (639,000) Liabilities S(1,154,00) (988, ae0) (1,770,000) $(3,824,000 Comon stock Rtained earnings S(1,646,800) Total liabilities and equity a. Determine the December 31, 2018, consolidated belance for each of the following accounts: Depreciation Expense Dividends Declared Buildings Goodwill Revenues Equipment Common Stock b. How does the parent's cholce of an eccounting methad for ts Investment affect the balances computed In requirement (a) cWhich method of accounting forthis subaldary la the parentactually using for Internal reporting purposes d. Determine parent's Investment Income for 2018 under pertiel equity method and equty method. e. What would be Faxx's balance for retained earnings as of January 1, 2018, each of the follawing methacs had been in usel Inital velue method. Partal equity method. Equity method Problem 3-24 (LO 3-2, 3-3, 3-4) Faxx Carparation acquired all of Greenburg Company's outstanding stock on January 1, 2016, for $91,000 cesh. Greenburg's accounting records showed net sssets on that dete of $688,000, although equlpment with a 10-year life was undervalued on the records by $175,000. Any recognized goodwill is considered to have san indefinite life Greenburq reports net Income in 2016 of $105,500 and $113,000 In 2017. The subsidiary declared dividends of $20,000 In esch of these two yeara Account balances for the year ending December 31 2018, follow. Credit balances are Indicated by parenthese Grenburg $ (848,8e0) 218,ae 383.000 Fax Revnues $(1,136,8e0) 142,80 338,800 (20.000) Cost of goods sold Depreciat Lon expense Investment income (676,8e0) (247,a0) Not incone Rtained earnings, 1/1/18 Nt incon S(1,214,0) (676,8e0) 128,800 $(1,770,000 S (412,00y (247,800) Dividends declared s(639,800) Rtained earnings, 12/31/18 Current assets 389,800 911,000 918,800 98,aea 696.800 188, Investmont in subsidiary Equipment (net) Buildings (net) Land 726,aee 588,aee 144,000 3,824,8ee 1,646,8 Total assets $ (787,800) (388, aea) (639,000) Liabilities S(1,154,00) (988, ae0) (1,770,000) $(3,824,000 Comon stock Rtained earnings S(1,646,800) Total liabilities and equity a. Determine the December 31, 2018, consolidated belance for each of the following accounts: Depreciation Expense Dividends Declared Buildings Goodwill Revenues Equipment Common Stock b. How does the parent's cholce of an eccounting methad for ts Investment affect the balances computed In requirement (a) cWhich method of accounting forthis subaldary la the parentactually using for Internal reporting purposes d. Determine parent's Investment Income for 2018 under pertiel equity method and equty method. e. What would be Faxx's balance for retained earnings as of January 1, 2018, each of the follawing methacs had been in usel Inital velue method. Partal equity method. Equity method