Foxx Corporation acquired all of Greenburg Company's outstanding stock on January 1, 2016, for $757,000 cash. Greenburg's accounting records showed net assets on that date of $571,000, although equipment with a 10-year life was undervalued on the records by $132,500. Any recognized goodwill is considered to have an indefinite life. Greenburg reports net income in 2016 of $113,000 and $136,500 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. Account balances for the year ending December 31, 2018, follow. Credit balances are indicated by parentheses. Greenburg $ (824,000) 286,089 404,000 DOK $ $ ences Revenues Cost of goods sold Depreciation expense Investment income Net income Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 Current assets Investment in subsidiary Equipment (net) Buildings (net) $(1,140,000) 142,500 420,000 (20,000) $ (597,500) $(1,190,000) (597,500) 120,000 $(1,667,500) 331,000 757,000 1,030,000 896,000 660,000 $ 3,674,000 $ (1, 106,500) (900,000) (1,662,500) $ (3,674,000) (214,000) (371,000) (214,000) 20,000 (565, 000) 162,000 $ Land Total assets Liabilities Common stock Retained earnings Total liabilities and equity 600,000 558,000 160,000 $ 1,480,000 $ (615, 000) (300,000) (565,000) $(1,480,000) a. Determine the December 31, 2018, consolidated balance for each of the following accounts: Depreciation Expense Dividends Declared Revenues Equipment Buildings Goodwill Common Stock b. How does the parent's choice of an accounting method for its investment affect the balances computed in requirement (a)? c. Which method of accounting for this subsidiary is the parent actually using for internal reporting purposes? d. Determine parent's investment income for 2018 under partial equity method and equity method. e. What would be Foxx's 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. Complete this question by entering your answers in the tabs below. eBook Print Req A Req B and C Reg D and E eferences Determine the December 31, 2018, consolidated balance for each of the following accounts: Consolidated Balances Depreciation expense Dividends declared Revenues Equipment Buildings Goodwill Common stock Complete this question by entering your answers in the tabs below. Dok Req A Reg B and C Reg D and E rences b. How does the parent's choice of an accounting method for its investment affect the balances computed in requirement (a) C. Which method of accounting for this subsidiary is the parent actually using for internal reporting purposes? b. Yes, affects consolidated totals No, doesn't affect consolidated totals but only internal reporting of parent No, neither affects consolidated totals nor internal reporting of parent Initial value method Partial equity method Equity method ReqA Reg D and E> Complete this question by entering your answers in the tabs below. eBook Reg A Red Band C Reg D and E references d. Determine parent's investment income for 2018 under partial equity method and equity method. e. What would be Fox's balance for retained earnings as of January 1, 2018, if each of the following methods had been in use? Investment Income Retained Earnings Initial value method | Partial equlty method | Equity method ( Req Band C
