1. On Jan 1, 2017 Parent BUYS an 70% interest in Sub for $630,000. On that date the Stockholders Equity of the SUB was as follows:

Common Stock $50,000

Paid in Capital $290,000

Retained Earnings $200,000

The Book Values of the SUB had the following appraisal value differences:

Inventory is undervalued by $20,000 (Assume FIFO Method)

Building is overvalued by $225,000 (8 year remaining useful life)

Bonds Payable Overvalued by 10,000 (4 year remaining life)

Trial Balance 12/31/20

Parent SUB

Cash $50,000 $75,000

Inventory $290,000 $540,000

Investment in Sub $630,000 -0-

Building $772,000 $450,000

Accum Dep ($120,000) ($105,000)

Goodwill $0 $0

Bond Payable ($50,000) (100,000)

Pre/Disc $10,000 $0

Common Stock ($310,000) ($50,000)

PIC ($425,000) ($290,000)

R/E-S ($465,000)

R/E-P ($715,000)

Sales revenue ($925,000) ($600,000)

COGS $586,000 $425,000

Operating Expenses $150,000 $65,000

Depreciation Expense $10,000 6,500

Interest Expense 15,000 8,500

Dividend Income ($28,000) -0-

Dividends 60,000 $40,000

NCI $0 $0

Prepare the Elimination & Adjusting Entries