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Problem 2-72 points PLEASE SHow ALLwoRK/CALOULATIONS FOR CREDIT! On January 1, 20x4, Parent Company acquiredsubsidiary Company. Parent paid $400,000 for 80% of subsidiary's common stock. On the date of acquisition, Subsidiary had the following Balance Sheet: Subsidiary Company Balance Sheet January 1, 20x4 Liabilities and Equity Assets 17,597 Accounts receivable 90,000 Accounts payable Inventory 50,000 Bonds payable 100,000 2,403 60,000 Premium on bonds payable Land 100,000 Buildings Accumulated depr (30,000) Common stock, par $1 10,000 90,000 80,000 Other PIC Equipment 100,000 Accumulated depr 30,000) Retained earnings 320,000 320,000 Total Liabilities and Equity Total Assets Buildings, which have a 20-year iife, are undervalued by $130,000. Equipment, which has a 5-year life, is undervalued by $50,000. Any remaining excess is considered to be goodwill subsidiary issued $100,000 of 8%, 10-year bonds for $103,432 on January 1, 20X1, when the market rate was 7.5%. Annual interest is paid on December 31. Parent purchased the bonds for $95,514 on January 1, 20X5. Both companies use the straight-line method to amortize the premium/discount on the bonds. Parent uses the simple equity method to account for its Investment in Subsidiary Co.'s Stock. On January 1, 20X5, Parent held merchandise acquired from Subsidiary for $9,000. During 20X5, subsidiary sold $20,000 worth of merchandise to Parent. Parent held $12,000 of this merchandise at December 31, 20X5. Parent owed subsidiary $7,000 on December 31, 20x5 as a result of the intercompany sales. Subsidiary has a gross profit rate of 25%. Parent and subsidiary had the following trial balances on December 31, 20x5 (See Attached Worksheet on page 10)