method, noncontrolling tercompany inventory 1.2015. for $192.600 were Common Stock for the 20% of shares values for all items 26.000.(2) buildings (3) the licenses intangible 023 66. Comprehensive consolidation subsequent to date of acquisition Equity method Interest, AAP computation, goodwill, upstream and downstream intercompan profits, downstream intercompany depreciable asset gain A parent company acquired 80% of the stock of a subsidiary company on January 1, 2016 On this date, the balances of the subsidiary's stockholders' equity accounts were $120,000, and Retained Earnings. $24,000. On January 1, 2015, the market value for the not purchased by the parent was $47,400. On January 1, 2015, the subsidiary's recorded book values were equal to fair values fo except four: (1) accounts receivable had a book value of $30,000 and a fair value of $26,000.00 and equipment, net had a book value of $50,000 and a fair value of $68,000, (3) the license asset had a book value of $35,000 and a fair value of $77,000, and (4) notes payable had a book $20.000 and a fair value of $14,000. Both companies use the FIFO inventory method and sell all of inventories at least once per year. The net balance of accounts receivables are collected in the follo year. On the acquisition date, the subsidiary's buildings and equipment, net had a remaining useful life 6 years, licenses had a remaining useful life of 7 years, and notes payable had a remaining term of 4 years On January 1, 2018, the parent sold a building to the subsidiary for $80,000. On this date, the building was carried on the parent's books (net of accumulated depreciation) at $65,000. Both com nies estimated that the building has a remaining life of 6 years on the intercompany sale date, with no salvage value. Each company routinely sells merchandise to the other company, with a profit margin of 25 per: cent of selling price (regardless of the direction of the sales During 2019, intercompany sales amount to $15,000, of which $8,000 of merchandise remains in the ending inventory of the parent. On December 31, 2019, $4,000 of these intercompany sales remained unpaid. Additionally, the subsidiary's December 31, 2018 inventory includes $12.000 of merchandise purchased in the preceding year from the paren. During 2018, intercompany sales amount to $20,000, and on December 31, 2018, $6,000 of these inter company sales remained unpaid. Business Publishers Consod 100 O DS The parent accoun counts for its Equity Investment in the subsidiary using the city method. Uncon allocated pro-rata. The pre-consolidation financial statements for the two companies ed December 31, 2019, are provided belo the pear ended Parent Subsidiary Parent Subsidiary of goods sold $500,000 (260,000) 240,000 (12.000) (155,000) (6.000) $200.000 (128.000) 72.000 (10.000) (38.000) (2.000) (50,000) Balance sheet: Cash Accounts receivable.. Inventories.. Buildings and equipment, net.... Other assets Licenses Equity investment... Total assets. $45.000 54 000 130.000 126.000 57.000 on & amort expense ... $ 25 000 48 000 4 000 90.000 100.000 10.000 ng expenses. 233,000 $645,000 $319.000 loss) from subsidiary..... (173,000) 14,300 $ 81,300 $ 22,000 ent of retained earnings: ng retained earnings..... $266,700 81,300 (60,000) $288,000 $129.000 22,000 (15,000) $136.000 Accounts payable.. Notes payable..... Other liabilities Common stock Retained earnings .... Total liabilities and equity ........... $ 35.000 50.000 22.000 250.000 288.000 $645.000 $ 15,000 22.000 26.000 120.000 136,000 $319,000 Dudends declared...... Ending retained earnings ......... Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP). the controlling interest AAP, and troncontrolling interest AAP. Calculate and organize the profits and losses on intercompany transactions and balances. Compute the pre-consolidation Equity Investment account beginning and ending balances starting with the stockholders' equity of the subsidiary. Reconstruct the activity in the narent's pre-consolidation Equity Investment T-account for the year of consolidation. Independently compute the owners' equity attributable to the noncontrolling interest beginning and ending balances starting with the owners' equity of the subsidiary. pendently calculate consolidated net income, controlling interest net income, and boncontrolling interest net income. plete the consolidating entries according to the C-E-A-D-l sequence and complete the consolidation worksheet. rehane t of acquisition Equity method, noncontrolling method, noncontrolling tercompany inventory 1.2015. for $192.600 were Common Stock for the 20% of shares values for all items 26.000.(2) buildings (3) the licenses intangible 023 66. Comprehensive consolidation subsequent to date of acquisition Equity method Interest, AAP computation, goodwill, upstream and downstream intercompan profits, downstream intercompany depreciable asset gain A parent company acquired 80% of the stock of a subsidiary company on January 1, 2016 On this date, the balances of the subsidiary's stockholders' equity accounts were $120,000, and Retained Earnings. $24,000. On January 1, 2015, the market value for the not purchased by the parent was $47,400. On January 1, 2015, the subsidiary's recorded book values were equal to fair values fo except four: (1) accounts receivable had a book value of $30,000 and a fair value of $26,000.00 and equipment, net had a book value of $50,000 and a fair value of $68,000, (3) the license asset had a book value of $35,000 and a fair value of $77,000, and (4) notes payable had a book $20.000 and a fair value of $14,000. Both companies use the FIFO inventory method and sell all of inventories at least once per year. The net balance of accounts receivables are collected in the follo year. On the acquisition date, the subsidiary's buildings and equipment, net had a remaining useful life 6 years, licenses had a remaining useful life of 7 years, and notes payable had a remaining term of 4 years On January 1, 2018, the parent sold a building to the subsidiary for $80,000. On this date, the building was carried on the parent's books (net of accumulated depreciation) at $65,000. Both com nies estimated that the building has a remaining life of 6 years on the intercompany sale date, with no salvage value. Each company routinely sells merchandise to the other company, with a profit margin of 25 per: cent of selling price (regardless of the direction of the sales During 2019, intercompany sales amount to $15,000, of which $8,000 of merchandise remains in the ending inventory of the parent. On December 31, 2019, $4,000 of these intercompany sales remained unpaid. Additionally, the subsidiary's December 31, 2018 inventory includes $12.000 of merchandise purchased in the preceding year from the paren. During 2018, intercompany sales amount to $20,000, and on December 31, 2018, $6,000 of these inter company sales remained unpaid. Business Publishers Consod 100 O DS The parent accoun counts for its Equity Investment in the subsidiary using the city method. Uncon allocated pro-rata. The pre-consolidation financial statements for the two companies ed December 31, 2019, are provided belo the pear ended Parent Subsidiary Parent Subsidiary of goods sold $500,000 (260,000) 240,000 (12.000) (155,000) (6.000) $200.000 (128.000) 72.000 (10.000) (38.000) (2.000) (50,000) Balance sheet: Cash Accounts receivable.. Inventories.. Buildings and equipment, net.... Other assets Licenses Equity investment... Total assets. $45.000 54 000 130.000 126.000 57.000 on & amort expense ... $ 25 000 48 000 4 000 90.000 100.000 10.000 ng expenses. 233,000 $645,000 $319.000 loss) from subsidiary..... (173,000) 14,300 $ 81,300 $ 22,000 ent of retained earnings: ng retained earnings..... $266,700 81,300 (60,000) $288,000 $129.000 22,000 (15,000) $136.000 Accounts payable.. Notes payable..... Other liabilities Common stock Retained earnings .... Total liabilities and equity ........... $ 35.000 50.000 22.000 250.000 288.000 $645.000 $ 15,000 22.000 26.000 120.000 136,000 $319,000 Dudends declared...... Ending retained earnings ......... Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP). the controlling interest AAP, and troncontrolling interest AAP. Calculate and organize the profits and losses on intercompany transactions and balances. Compute the pre-consolidation Equity Investment account beginning and ending balances starting with the stockholders' equity of the subsidiary. Reconstruct the activity in the narent's pre-consolidation Equity Investment T-account for the year of consolidation. Independently compute the owners' equity attributable to the noncontrolling interest beginning and ending balances starting with the owners' equity of the subsidiary. pendently calculate consolidated net income, controlling interest net income, and boncontrolling interest net income. plete the consolidating entries according to the C-E-A-D-l sequence and complete the consolidation worksheet. rehane t of acquisition Equity method, noncontrolling