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In January 1, 2014 James Company has acquired 85% of LuLu Company for $2,125,000 on the date of the acquisition the subsidiary had retained earnings

In January 1, 2014 James Company has acquired 85% of LuLu Company for $2,125,000 on the date of the acquisition the subsidiary had retained earnings $650,000 and a capital of $1,100,000.

Separate balance sheet as of 1 January 2014 for James and its Subsidiary.

Description

Parents

Subsidiary

Cash

60,000

35,000

Receivable

35,000

40,000

Land

1,550,000

550,000

Property

1,500,000

1,200,000

Investment in Subsidiary

2,125,000

-

Total asset

5,270,000

1,825,000

Account payable

50,000

60,000

Other liabilities

67,000

15,000

Capital stock

3,900,000

1,100,000

Retained earnings

1,253,000

650,000

Total equity and liabilities

5,270,000

1,825,000

Q-Prepare the consolidated balance sheet as of January 1, 2014.

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