On January 1, 2017, Parent Corp. paid $1,710,000 cash to acquire 90% of the outstanding common stock of Sub Inc. Sub Inc. book value was only $725,000 at the time. The recorded assets of Sub Inc. were fairly valued at the date of the acquisition. However, Parent determined that Sub Inc. had developed a customer base with a fair value of $800,000 that was not reflected in the recorded assets. The customer base had a 10-year remaining life for amortization purposes. Following are the individual financial records for these two companies.

A) Prepare the Schedule as of January 1, 2017.

B) Prepare the consolidation worksheet for this business combination as of December 31. 2018, recording all the worksheet entries and linking them into the consolidating worksheet, with correct labels, to present the correct consolidated balances.

December 31, 2018 Accounts Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in Sub Income Separate company net income Retained Earnings 1/1 Net Income Dividends paid Retained Earnings 12/31 Parent (1,843,000) 1,100,000 125,000 275,000 27,500 (121,500) (437,000) Sub (675,000) 322,000 120,000 11,000 7,000 (215,000) (2,625,000) (437,000) 350,000 (2,712,000) (395,000) (215,000) 25,000 (585,000) 430,000 Current Assets Investment in Sub Buildings and Equipment Copyrights Total Assets 1,204,000 1,854,000 931,000 950.000 4,939,000 863,000 107,000 1,400,000 Accounts Payable Notes Payable Common Stock Additional Paid-In Capital Retained Earnings 12/31 Total Liab, and SE (485,000) (542,000) (900,000) (300,000) (2,712,000) (4,939,000) (200,000) (155,000) (400,000) (60,000) (585,000) (1,400,000)