in 1/1/2019 company A purchased 75% of company B outstanding share capital cash of 250000 $, and it issued 50,000 shares for investment. The book value of issued shares is 6$, and market value is 15$. And it paid 4000$ cash as a commission and 8000$ auditing and legal expenses for combination.

Company A used purchase method to account for investment in company B and used equity method to address the change of investment account.

Below are the financial statements of A and B companies before investment.

Advanced Accounting in 1/1/2019 company A purchased 75% of company B outstanding share capital cash of 250000 5, and it issued 50,000 shares for investment. The book value of issued shares is 65, and market value is 155. And it paid 40005 cash as a commission and 80005 auditing and legal expenses for combination. Company A used purchase method to account for investment in company B and used equity method to address the change of investment account. Below are the financial statements of A and B companies before investment. Company A Com - an B book value fair value Cash 190000 Receivables 130000 Inventory 180000 Equipment 100000 Cars 60000 660000 215000 20000 Payable 210000 65000 Share capital 350000 120000 Additional paid-in capital 75000 20000 Retained Earnings 25000 10000 660000 215000 The financial statement of parent and subsidiary at 31/12/2019 reported as follow: Income statements at 31/12/2019 A company B company Sales 800000 150000 Cost of goods sold (650000) (80000) Gross profit 150000 70000 Managerial and sales expenses (25000) (10000) Net profit 125000 60000 investment profit in subsidiary ?? Year net profit ?? Retained earnings at 31/12/2019 A company B company Retained earning 1/1 ?? 10000 Year profits or losses ?? 60000 Dividends (130000) (25000) Retained earnings 31/12 ?? 45000 SFP on 31/12/2019 A company B company Cash 6000 44000 Receivables 96200 85000l-"_ ___ Enuiment's, net _m :_ __m The following are additional information related to subsidiary company: 1- Remaining age of Equipment that are in the subsidiary company at date of acquisition (1/1/2019) is 4 years. 2- At the year of 2019, 75% of inventory have been sold. And remaining inventory have been sold on 2020. 3- Remaining age of Cars that are in the subsidiary company at date of acquisition (1/1/2019) is 4 years. Requirement: 1- Prepare the consolidated financial statement at the date of acquisition. 2- Prepare the consolidate financial statements for the year of acquisition