Please help with these accounting problems, thanks.
Parkin Industries, a U.S. company, acquired a wholly-owned subsidiary, located in Italy, at the beginning of the current year, for 200,000. The subsidiary's functional currency is the euro. The balance sheet of the subsidiary at the date of acquisition was as follows: Assets Current assets 50,000 Plant and equipment, net 200,000 Total assets 250,000 Liabilities and Equity Liabilities Capital stock Retained earnings Total liabilities and equity 160,000 20,000 70,000 250,000 Appropriate revaluations of the subsidiary's assets at the date of acquisition are as follows: Inventories are undervalued by 1,000. The subsidiary sold the inventory during the current year. Equipment is undervalued by 15,000. The equipment has a 10-year remaining life, straight-line. Identifiable indefinite life intangible assets, previously unreported, have a fair value of 40,000. During the current year, there was no impairment of either identifiable intangible assets or goodwill. The exchange rate at the beginning of the year was $1.20/. The average rate for the year was $1.22/, and the rate at the end of the year was $1.25/. At the end of the year, consolidation eliminating entry (R) has what effect on consolidated other comprehensive income? O A. $6,600 gain O B. $5,500 gain O C. No effect O D. $4,500 loss Pilgrim Corporation acquires all of the stock of Sonic Company for $5,000,000 in cash. Sonic's net assets had a book value of $3,000,000 at the date of acquisition. The book values of Sonic's assets and liabilities approximated fair values, except that Sonic reported inventories at $900,000 more than fair value and plant assets at $2,000,000 more than fair value. In addition, Sonic had unrecorded identifiable intangible assets with an estimated fair value of $5,000,000, appropriately capitalized according to GAAP. Consolidation working paper eliminating entry (R) at the date of acquisition includes a credit to Investment in Sonic in the amount of: O A. $2,100,000 O B. $7,900,000 O C. $3,000,000 O D. $5,000,000 Potash Corporation acquired the voting stock of Safestyle Company on January 1, 2019 for $50 million. Safestyle's book value at the time was $10 million, consisting of $2 million of capital stock and $8 million of retained earnings. The $40 million difference between fair and book value was attributed to goodwill. It is now December 31, 2020, the end of the accounting year and two years after the acquisition. Safestyle's January 1, 2020 retained earnings balance is $11 million, and it reports net income of $1.8 million for 2020. Safestyle declares no dividends and has no other comprehensive income. Goodwill from the acquisition was impaired by $1 million in 2019 and $500,000 in 2020. Potash uses the complete equity method to report its investment in Safestyle on its own books. What is 2020 equity in net income of Safestyle, reported on Potash's books? O A. $ 800,000 O B. $1,300,000 OC. $ 300,000 O D. $1,800,000 Parkin Industries, a U.S. company, acquired a wholly-owned subsidiary, located in Italy, at the beginning of the current year, for 200,000. The subsidiary's functional currency is the euro. The balance sheet of the subsidiary at the date of acquisition was as follows: Assets Current assets 50,000 Plant and equipment, net 200,000 Total assets 250,000 Liabilities and Equity Liabilities Capital stock Retained earnings Total liabilities and equity 160,000 20,000 70,000 250,000 Appropriate revaluations of the subsidiary's assets at the date of acquisition are as follows: Inventories are undervalued by 1,000. The subsidiary sold the inventory during the current year. Equipment is undervalued by 15,000. The equipment has a 10-year remaining life, straight-line. Identifiable indefinite life intangible assets, previously unreported, have a fair value of 40,000. During the current year, there was no impairment of either identifiable intangible assets or goodwill. The exchange rate at the beginning of the year was $1.20/. The average rate for the year was $1.22/, and the rate at the end of the year was $1.25/. At the end of the year, consolidation eliminating entry (R) has what effect on consolidated other comprehensive income? O A. $6,600 gain O B. $5,500 gain O C. No effect O D. $4,500 loss Pilgrim Corporation acquires all of the stock of Sonic Company for $5,000,000 in cash. Sonic's net assets had a book value of $3,000,000 at the date of acquisition. The book values of Sonic's assets and liabilities approximated fair values, except that Sonic reported inventories at $900,000 more than fair value and plant assets at $2,000,000 more than fair value. In addition, Sonic had unrecorded identifiable intangible assets with an estimated fair value of $5,000,000, appropriately capitalized according to GAAP. Consolidation working paper eliminating entry (R) at the date of acquisition includes a credit to Investment in Sonic in the amount of: O A. $2,100,000 O B. $7,900,000 O C. $3,000,000 O D. $5,000,000 Potash Corporation acquired the voting stock of Safestyle Company on January 1, 2019 for $50 million. Safestyle's book value at the time was $10 million, consisting of $2 million of capital stock and $8 million of retained earnings. The $40 million difference between fair and book value was attributed to goodwill. It is now December 31, 2020, the end of the accounting year and two years after the acquisition. Safestyle's January 1, 2020 retained earnings balance is $11 million, and it reports net income of $1.8 million for 2020. Safestyle declares no dividends and has no other comprehensive income. Goodwill from the acquisition was impaired by $1 million in 2019 and $500,000 in 2020. Potash uses the complete equity method to report its investment in Safestyle on its own books. What is 2020 equity in net income of Safestyle, reported on Potash's books? O A. $ 800,000 O B. $1,300,000 OC. $ 300,000 O D. $1,800,000
