On January 31, 2021, Parent Inc. purchased 90% of Sub Inc., issuing common shares of Parent with a market value of $400,000. Costs were $10,000 to issue the shares and $16,000 of other legal costs.

Parent and Sub Inc had the following balance sheets on January 30, 2021 immediately following the acquisition:

	Parent Inc.	Sub Inc.	Sub Inc.
	(carrying value)	(carrying value)	(fair value)
Cash	$1,200,000	$300,000	$300,000
Accounts Receivable	$ 400,000	$ 64,000	$ 64,000
Inventory	$ 240,000	$ 80,000	$ 60,000
Plant and Equipment (net)	$ 960,000	$350,000	$300,000
Accumulated depreciation	($100,000)	($94,000)
Trademark		$ 20,000	$ 36,000
Total Assets	$2,700,000	$720,000	$760,000
Accounts Payable	$1,500,000	$300,000	$300,000
Bonds Payable	$ 600,000	$240,000	$210,000
			$510,000
Common Shares	$ 500,000	$ 60,000
Retained Earnings	$ 100,000	$120,000
Total Liabilities and Equity	$2,700,000	$720,000

Required:

14. 1. Calculate goodwill and non-controlling interest on the transaction using the FVE method.
    2. Prepare the journal entries
       1. that would be booked in Parent Inc. from the acquisition
       2. the consolidation entries needed
    3. Prepare the consolidated balance sheet on January 31, 2021 immediately following the acquisition using the worksheet approach.
15. Start with Parent & Sub entity statements.

--Include in your Parent stmt the entries from (b)(i).

• Include Debits, Credits columns showing the adjustments from (b)(ii), including reference#s to each journal entry

Parent Inc.

Sub Inc.

Ref#

Debit

Ref#

Credit

Consolidated B/Sheet