On December 31, 2016, a parent acquires all of the outstanding common stock of a subsidiary for a cash purchase price of $250,000. On that date, the property, plant and equipment of the subsidiary was undervalued by $40,000. For all the other assets and liabilities of the subsidiary, the fair values were not different from the book values. On the date of acquisition, the parent and subsidiary report the following balance sheets: Parent Subsidiary ASSETS Cash $150,000 $50,000 Receivables 250,000 100,000 Inventory 300,000 200,000 PPE (net) 1,150,000 200,000 Investment in Subsidiary 250,000 TOTAL ASSETS $2,100,000 $550,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities $100,000 $100,000 Bonds Payable 250,000 250,000 Common Stock 800,000 50,000 APIC 600,000 60,000 Retained Earnings 350,000 90,000 TOTAL LIAB + SE $2,100,000 $550,000 a. Calculate the goodwill (if any) in the acquisition. b. Prepare the equity method journal entry on 12/31/2016 for the purchase by parent of 100% of the common stock of the subsidiary c. Prepare the consolidation journal entries for 2016 (also called worksheet journal entries). d. Prepare the 12/31/2016 consolidated balance sheet for the parent and its subsidiary. On December 31, 2016, a parent acquires all of the outstanding common stock of a subsidiary for a cash purchase price of $250,000. On that date, the property, plant and equipment of the subsidiary was undervalued by $40,000. For all the other assets and liabilities of the subsidiary, the fair values were not different from the book values. On the date of acquisition, the parent and subsidiary report the following balance sheets: Parent Subsidiary ASSETS Cash $150,000 $50,000 Receivables 250,000 100,000 Inventory 300,000 200,000 PPE (net) 1,150,000 200,000 Investment in Subsidiary 250,000 TOTAL ASSETS $2,100,000 $550,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities $100,000 $100,000 Bonds Payable 250,000 250,000 Common Stock 800,000 50,000 APIC 600,000 60,000 Retained Earnings 350,000 90,000 TOTAL LIAB + SE $2,100,000 $550,000 a. Calculate the goodwill (if any) in the acquisition. b. Prepare the equity method journal entry on 12/31/2016 for the purchase by parent of 100% of the common stock of the subsidiary c. Prepare the consolidation journal entries for 2016 (also called worksheet journal entries). d. Prepare the 12/31/2016 consolidated balance sheet for the parent and its subsidiary