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Foxx Corporation acquired all ofGreenburg Company's outstanding stock on January 1, 2016, for $922,000 cash. Greenburg's accounting records showed net assets on that date of $702,000, although equipment with a 10-year life was undervalued on the records by $163,000. Any recognized goodwill is considered to have an indefinite life. Greenburg reports net income in 2016 of $132,000 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 $(1,144,000) $ (968,000) Cost of goods sold 143,000 242,000 Depreciation expense 316,000 357,000 Investment income (20,000) 0 Net income 5 (705,000) $ (369,000) Retained earnings, 1/1/18 $(1,252,000) $ (351,000) Net income (705,000) (369,000) Dividends declared 120.000 20.000 Retained earnings, 12/31/18 $(l,837,000) $ (700,000) Current assets 5 323,000 $ 150,000 Investment in subsidiary 922,000 0 Equipment (net) 902,000 796,000 Buildings (net) 812,000 406,000 Land 734,000 128,000 Total assets $ 3,693,000 $ 1,480,000 Liabilities $ (956,000) $ (480,000) Common stock (900,000) (300,000) Retained earnings (1,837,000) (700,000) Total liabilities and equity $(3.593.000) $(1,480,000) ' 3. Determine the December 31, 2018, consolidated balance for each ofthe 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 forthis subsidiary is the parent actually using for internal reporting purposes? b c 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. Req A Req B and C Req D and E Determine the December 31, 2018, consolidated balance for each of the following accounts: Consolidated Balances Depreciation expense Dividends declared Revenues Equipment Buildings Goodwill Common stockReq A Req B and C Req D and E 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. OYes, affects consolidated totals ONo, doesn't affect consolidated totals but only internal reporting of parent ONo, neither affects consolidated totals nor internal reporting of parent C. OInitial value method OPartial equity method OEquity methodReq B and C Req D and E 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
