Inferring consolidation entries from consolidated financial statements-Cost method Assume a parent company acquired a subsidiary on January 1, 2012. The purchase price was $1,312,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following [A] assets: [A] Asset Original Amount Original Useful Life Property, plant and equipment (PPD), net $300,000 20 years Patent Goodwill 432,000 580,000 $1,312,000 12 years Indefinite The parent company uses the cost method of pre-consolidation Equity Investment bookkeeping. The Goodwill asset has been tested annually for impairment and has not been found to be impaired. Selected accounts from the parent, subsidiary, and consolidated financial statements for the year ended December 31, 2016, are as follows: Income statement Sales Parent Subsidiary Consolidated $9.075,000 $2,000,000 11,075,000 Cost of goods sold Gross pratit Investment income (6,534,000) 1,188,000) 17,722,000) 2,541,000 812,000 50,800 3,353,000 Operating expensas Net income (1,361,280) (514,800) $1.200,520 $297,200 11,977,080) $1,425,920 Statement of retained earnings BOY retained eamings Net income Dividends Ending retained earnings Balance sheet Assots 6,328,440 1,043,000 1,240,520 297,200 (306,440) (60,800) $7,252,520 $1,279,400 6,594,440 1,425,920 (305,440) $7,713,920 Cash Accounts receivable Inventory Equity investment 1,709,760 531,200 2,686,800 459,600 3,520,200 2.182,000 2,240,960 3,14,400 589,800 4,110,000 Property, plant & equipment 12.752610 1,091,100 14,069 040 Patent list Goodwill $22,851,400 $2,672,000 252,000 580,000 $24,398,400 Liabilities and stockholders' equity Accounts payable Accrued liabilities Long-term liabilities 1,378,640 188,760 1,578,840 5,550,000 1,517,400 246,840 660,000 1,825,680 6,210,000 Common stock AFIC 132,000 14 6.285,880 165,000 6,285,880 Retained earnings 7,262,520 1,279,400 7,713,920 $22,851,400 $2,577,000 $74,398,400