MarshaMarshaMarsha inc. purchased 100N of the outstanding stock efONose inc. for purposes of heriontal conselidation and paid $2,000,000 cash for the steck The balance sheets for thetwo companiesimmediately after the acquisition are an follows MarshaMarshaMarsha Ine. ChMyNose Inc. Balance Sheet of /15/20 Balance Sheet a of 9/15/20 Aeta Liabiities Ownerstauity Assets Liabilities& Ownery Equity teMa feMat Book e ook Ve Book Value Book Vae Value $1,000,000 250.000 1,500,000 $2,750,000 $a50,000 $a50.000 Cash $750,000 500.000 9Cash Note Payable Bonds Payable Total Liabilities 10 AR 250,000 50,000 Notes Payable 50,000 450,000 250,000 150,000 s00,000 1000,000 100,000 150,000 11 Inventory 12 Net Fixed Assets 13 Trademarks Inventory Net Fised Assets 600,000 2,500,000 Mortgnge Payable Total Liabilities 500,000 S400,000 500.000 Investment in Subsidiary 2,000,000 Common Stock Common Stack s00,000 25,000 175,000 $200,000 14 Retained Earninp Total Equity Retained Earnings Total Equity: 3,100.000 $3,600,000 15 16 18 Total Assets $1.000,000 Total Liabilities &O.E: $1,000,000 Total Assets $6,350.000 Total Liabilities &O.E: $6,350,000 A Complete the below Consolidation Entries for the "Consolidation & Blimination Worksheet" for this acquisition as of thedate of the acquisition by entering the proper debit and credit amounts in the gray shaded cells below. 19 20 Trial Balances Consolidation Entries Combined Consolidated Balance Debit 21 Account 22 Cash Marhal OhMee Entiy Entex Credia $750,000 500,000 $750,000 750,000 Entry "A" Bliminate the subsidiary's equity against the parent's investment account 23 AR 24 Inventory 25 Net Fixed Assets 26 Trademarks 250,000 150,000 750,000 3,000.000 100,000 2,000,000 600,000 2,500,000 500,000 100,000 27 Investment in Subsidiary 28 Entry Adjust the net asets of the subsidiary to Fair Market Value and offet to the 2,000,000 investment 29 30 Goodwill (250,000) (1,250,000) (300,000) B00.000) O (1,500,000) S00,000) 31 A/P (1,000,000) Entry "C" Any remaining amount in the investment account gets eliminated to Goodwill 32 Notes Payable 33 Bonds Payable 34 Mortgage Payable 35 Common Stock-Marsha) 36 Common Stock-ChMyNose 37 Retained Earmings Marsha) 38 Retained Earnings - ChMyNose (250,000) (50,000) (500,000) a500.000) (500,000) (25,000) "A" (25,000) (3,100,000) (175,000) 3,100,000) (175,000) "A" 39 Totals MarshaMarshaMarsha inc. purchased 100N of the outstanding stock efONose inc. for purposes of heriontal conselidation and paid $2,000,000 cash for the steck The balance sheets for thetwo companiesimmediately after the acquisition are an follows MarshaMarshaMarsha Ine. ChMyNose Inc. Balance Sheet of /15/20 Balance Sheet a of 9/15/20 Aeta Liabiities Ownerstauity Assets Liabilities& Ownery Equity teMa feMat Book e ook Ve Book Value Book Vae Value $1,000,000 250.000 1,500,000 $2,750,000 $a50,000 $a50.000 Cash $750,000 500.000 9Cash Note Payable Bonds Payable Total Liabilities 10 AR 250,000 50,000 Notes Payable 50,000 450,000 250,000 150,000 s00,000 1000,000 100,000 150,000 11 Inventory 12 Net Fixed Assets 13 Trademarks Inventory Net Fised Assets 600,000 2,500,000 Mortgnge Payable Total Liabilities 500,000 S400,000 500.000 Investment in Subsidiary 2,000,000 Common Stock Common Stack s00,000 25,000 175,000 $200,000 14 Retained Earninp Total Equity Retained Earnings Total Equity: 3,100.000 $3,600,000 15 16 18 Total Assets $1.000,000 Total Liabilities &O.E: $1,000,000 Total Assets $6,350.000 Total Liabilities &O.E: $6,350,000 A Complete the below Consolidation Entries for the "Consolidation & Blimination Worksheet" for this acquisition as of thedate of the acquisition by entering the proper debit and credit amounts in the gray shaded cells below. 19 20 Trial Balances Consolidation Entries Combined Consolidated Balance Debit 21 Account 22 Cash Marhal OhMee Entiy Entex Credia $750,000 500,000 $750,000 750,000 Entry "A" Bliminate the subsidiary's equity against the parent's investment account 23 AR 24 Inventory 25 Net Fixed Assets 26 Trademarks 250,000 150,000 750,000 3,000.000 100,000 2,000,000 600,000 2,500,000 500,000 100,000 27 Investment in Subsidiary 28 Entry Adjust the net asets of the subsidiary to Fair Market Value and offet to the 2,000,000 investment 29 30 Goodwill (250,000) (1,250,000) (300,000) B00.000) O (1,500,000) S00,000) 31 A/P (1,000,000) Entry "C" Any remaining amount in the investment account gets eliminated to Goodwill 32 Notes Payable 33 Bonds Payable 34 Mortgage Payable 35 Common Stock-Marsha) 36 Common Stock-ChMyNose 37 Retained Earmings Marsha) 38 Retained Earnings - ChMyNose (250,000) (50,000) (500,000) a500.000) (500,000) (25,000) "A" (25,000) (3,100,000) (175,000) 3,100,000) (175,000) "A" 39 Totals