Parent Company acquired 100 percent of Subsidiary's outstanding stock for $6,162,500 cash on January 1, 2019. At the date of acquisition, Subsidiary's balance sheet was as follows: Cash Receivables Inventory Land Equipment (net) Software Liabilities Common Stock Retained Earnings 157,250 348,500 633,250 382,500 956,250 1,338,750 (1,793,500) (1,487,500) (535,500) Certain assets and liabilities had fair values that differed from their book values. The fair values of these were as follows (note: this is not the difference between fair value and book value; this is the fair value): Land Brand Name (indefinite life) Software (2 year life) IP R&D (10 year life) 340,000 255,000 1,763,750 1,275,000 Other relevant information: Parent's 1/1/2020 retained earnings balance (excluding the effect of any 2019 subsidiary transactions/income) was $3,952,500. The subsidiary had net income of $318,750 and paid no dividends in 2019. There are no intercompany payables/receivables between Parent and Subsidiary. The companies' 12/31/2020 trial balances are as follows: O O Parent (4,471,000) 3,489,250 ? ? Subsidiary (1,814,750) 1,113,500 Revenues Operating Expenses Income of Subsidiary Net Income (701,250) ? Retained Earnings - Parent, 1/1/2020 Retained Earnings - Subsidiary, 1/1/2020 Net Income (above) Dividends Declared Retained Earnings, 12/31/2020 ? (854,250) (701,250) 148,750 (1,406,750) 850,000 ? 403,750 607,750 837,250 Cash Receivables Inventory Investment in Subsidiary Co. Land Equipment (net) Software Other Intangibles Goodwill Total Assets 828,750 1,049,750 1,763,750 ? 1,449,250 1,020,425 361,250 425,000 1,326,000 616,250 ? 3,961,000 Liabilities Common Stock Retained Earnings (above) Total liabilities and equity (6,532,675) (2,125,000) ? (1,066,750) (1,487,500) (1,406,750) (3,961,000) ? Fair Value Allocation Schedule Price Paid Book Value Excess Initial Value to land to brand name to software to IPR&D to goodwill 6,162,500 (2,023,000) 4,139,500 (42,500) 255,000 425,000 1,275,000 2,227,000 Amortization 2019 2020 ? ? ? ? ? ? ? ? ? ? Required: Prepare an Excel workbook to consolidate Parent and Subsidiary's financial statements for 2020. The workbook should contain the following: Tab 1: The information contained on the previous page of these instructions, with the fair value allocation schedule completed. Tab 2: Calculation of the 12/31/2020 balance of the Investment in Subsidiary account (on Parent's books) using (1) the equity method, (2) the partial equity method, and (3) the initial value method. Also calculate Parent's 1/1/2020 retained earnings using each of these methods. Tab 2: A listing of all consolidation entries necessary under each of the respective methods (equity, partial equity, and initial value). Tab 3: Full Consolidation worksheet using the equity method. Tab 4: Full Consolidation worksheet using the partial equity method. Tab 5: Full Consolidation worksheet using the initial value method. Parent Company acquired 100 percent of Subsidiary's outstanding stock for $6,162,500 cash on January 1, 2019. At the date of acquisition, Subsidiary's balance sheet was as follows: Cash Receivables Inventory Land Equipment (net) Software Liabilities Common Stock Retained Earnings 157,250 348,500 633,250 382,500 956,250 1,338,750 (1,793,500) (1,487,500) (535,500) Certain assets and liabilities had fair values that differed from their book values. The fair values of these were as follows (note: this is not the difference between fair value and book value; this is the fair value): Land Brand Name (indefinite life) Software (2 year life) IP R&D (10 year life) 340,000 255,000 1,763,750 1,275,000 Other relevant information: Parent's 1/1/2020 retained earnings balance (excluding the effect of any 2019 subsidiary transactions/income) was $3,952,500. The subsidiary had net income of $318,750 and paid no dividends in 2019. There are no intercompany payables/receivables between Parent and Subsidiary. The companies' 12/31/2020 trial balances are as follows: O O Parent (4,471,000) 3,489,250 ? ? Subsidiary (1,814,750) 1,113,500 Revenues Operating Expenses Income of Subsidiary Net Income (701,250) ? Retained Earnings - Parent, 1/1/2020 Retained Earnings - Subsidiary, 1/1/2020 Net Income (above) Dividends Declared Retained Earnings, 12/31/2020 ? (854,250) (701,250) 148,750 (1,406,750) 850,000 ? 403,750 607,750 837,250 Cash Receivables Inventory Investment in Subsidiary Co. Land Equipment (net) Software Other Intangibles Goodwill Total Assets 828,750 1,049,750 1,763,750 ? 1,449,250 1,020,425 361,250 425,000 1,326,000 616,250 ? 3,961,000 Liabilities Common Stock Retained Earnings (above) Total liabilities and equity (6,532,675) (2,125,000) ? (1,066,750) (1,487,500) (1,406,750) (3,961,000) ? Fair Value Allocation Schedule Price Paid Book Value Excess Initial Value to land to brand name to software to IPR&D to goodwill 6,162,500 (2,023,000) 4,139,500 (42,500) 255,000 425,000 1,275,000 2,227,000 Amortization 2019 2020 ? ? ? ? ? ? ? ? ? ? Required: Prepare an Excel workbook to consolidate Parent and Subsidiary's financial statements for 2020. The workbook should contain the following: Tab 1: The information contained on the previous page of these instructions, with the fair value allocation schedule completed. Tab 2: Calculation of the 12/31/2020 balance of the Investment in Subsidiary account (on Parent's books) using (1) the equity method, (2) the partial equity method, and (3) the initial value method. Also calculate Parent's 1/1/2020 retained earnings using each of these methods. Tab 2: A listing of all consolidation entries necessary under each of the respective methods (equity, partial equity, and initial value). Tab 3: Full Consolidation worksheet using the equity method. Tab 4: Full Consolidation worksheet using the partial equity method. Tab 5: Full Consolidation worksheet using the initial value method