Question
i just need the answer PLZ Determining ending consolidated balances in the second year following the acquisitionCost method Assume a parent company acquired a subsidiary
i just need the answer PLZ
Determining ending consolidated balances in the second year following the acquisitionCost method
Assume a parent company acquired a subsidiary on January 1, 2015, for $2,086,000. The purchase price was $966,200 in excess of the subsidiarys $1,119,800 book value of Stockholders Equity on the acquisition date. Of this excess purchase price, $502,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $464,200 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $847,550. 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, 2016, are as follows:
Parent | Subsidiary | Parent | Subsidiary | |||
---|---|---|---|---|---|---|
Income statement | Balance sheet | |||||
Sales | $8,318,750 | $1,890,000 | Assets | |||
Cost of goods sold | (5,989,500) | (1,089,000) | Cash | $1,567,280 | $468,600 | |
Gross profit | 2,329,250 | 801,000 | Accounts receivable | 2,462,900 | 421,300 | |
Equity income | 37,400 | - | Inventory | 3,376,850 | 540,650 | |
Operating expenses | (1,247,840) | (546,900) | Equity investment | 2,086,000 | - | |
Net income | $1,118,810 | $254,100 | Property, plant & equipment | 17,189,920 | 1,000,450 | |
Statement of retained earnings | $26,682,950 | $2,431,000 | ||||
BOY retained earnings | 5,801,070 | 937,750 | Liabilities and stockholders' equity | |||
Net income | 1,118,810 | 254,100 | Accounts payable | $1,217,920 | $173,030 | |
Dividends | (262,570) | (37,400) | Accrued liabilities | 1,447,270 | 226,270 | |
Ending retained earnings | $6,657,310 | $1,154,450 | Long-term liabilities | 10,587,500 | 605,000 | |
Common stock | 925,060 | 121,000 | ||||
APIC | 5,847,890 | 151,250 | ||||
Retained earnings | 6,657,310 | 1,154,450 | ||||
$26,682,950 | $2,431,000 |
At what amount will the following accounts appear on the consolidated financial statements?
Do not use negative signs with any of your answers.
a. | Sales | Answer
|
b. | Investment income | Answer
|
c. | Operating expenses | Answer
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d. | Inventories | Answer
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e. | Equity investment | Answer
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f. | Property, plant & equipment, net | Answer
|
g. | Goodwill | Answer
|
h. | Common stock | Answer
|
i. | Retained earnings | Answer
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