Prepare consolidation spreadsheet for continuous sale of inventory-Cost method A parent company acquired 100 percent of the stock of a subsidiary company on January 1, 2016. for 560.000. On this date, the balances of the subsidiary's stockholders' equity accounts were Common Stock, 535,000, Additional Paid in Capital, 53,500 and Retained Earnings, 5136.500. On the acquisition date, the excess was assigned to the following Passes Original Aman Original Life Property plant &copment The Goodwill be tested for palement, and has not been found to be impaired ne te parent company els inventory to is wholly owned subsidiary. The subdiary mately well then try to customers outside of the comedated group. You have compled the following data for the years ending 2013 and 2017 tory sro Profil Remaining in Bacalle Und wery 2019 50.000 51.100 2013 57.350 510500 The carent solidation Equity investment The inventory not remaining at the end of a given year is sold to unaffiliated entities outside of the consolidated group during the next year. The parent uses the cost method of pre-consolidation Equity Investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2019. follow Paren Subsidiary Parent Subsidiary Income statement Balance sheet Sales 53.045.000 5560.000 Assets Cost of goods sold 36000 Cash 455.000 $175.000 Gross profit 510,000 224000 cc Operating expenses 1581.0001 60.000 escory SA DO Income from bradary 10 Equityinen Toti 5321500 584.000 Per plantet 2.000 Statement of retained caring DOW 1400.000 SO 400 Date Dends VO 116.50 Other current 1500 51.650.000 3337.000 Lonca 1.750.000 12000 100.000 35.000 ARC 1400 a. Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP) through December 31, 2019. Year ended December 31 2017 2018 $ 5 100% AAP Amortization - Dr (C) Property, plant and equipment (PPE).net Customer ist Royalty Agreement Goodwill et amortization 5 2018 December 31 2017 2018 $ 2019 Jan 100 Unamurthed AAP.Dron 2016 Property plant and equipment (PPE).net 5100.000 Customer List 70.000 Royalty Agreement Goodwill 1000 5 b. Compute the amount of the beginning of year IAD adjustment necessary for the consolidation of the financial statements for the year ended December 31, 2019. Do not use negative signs with your answers below. Chaith BOY 5 BOYtream c. Complete the consolidating entries according to the C-E-A-D-I sequence and complete the consolidation workshee Consolidation Journal Description Debit Credit [AD] [C] (4) [E] BOY Common stock (Subsidiary) BOY APIC (Subsidiary) [A] PPE.net Customer list Royalty Agreement [D] Customer List Royalty Agreement [cogs) To recognize prior year profit on intercompany sales, (sales) [icogs To defer current period profit on intercompany sales. Cipay . $ Use negative signs with answers in the Consolidated column for Cost of goods sold, Operating expenses and Dividends. Consolidation Worksheet Income statement Parent Subsidiary Debit Credit Consolidated Sales $3,045,000 $560,000 (sales) $ Cost of goods sold (2.135,000) (336,000) [lcogs) [lcogs) [Isales) Gross profit 910,000 224,000 Equity income 10,500 [C Operating expenses (581,000) (140,000) [D] Net income $339,500 $84.000 $ Statement of retained earnings BOY retained earnings $1,400,000 $283,500 [E] (ADJI $ Net income 339,500 84,000 Dividends (87,500) (10,500) [C] Ending retained earnings $1.652.000 $357.000 $ Balance sheet Assets Cash $455.000 $175,000 $ Accounts receivable 392,000 126,000 Cipay Inventory 595,000 175.000 [lcogs) Equity investment 560,000 (ADD) [E] [icogs) (A) PPE, net 2.800,000 294,000 (A) [D] Customer List [A] [D] Royalty Agreement (A) (D) Goodwill [A] $4,802.000 $770,000 $ $ Liabilities and equity Accounts payable Other currentliabilities Long-term liabilities Common stock APIC Retained earnings $245,000 280,000 1,750,000 490,000 385.000 1.652,000 $4,802,000 $70,000 payl 87.500 182,000 35,000 [E] 38,500 (E) 357.000 $770,000 $ $ $ Prepare consolidation spreadsheet for continuous sale of Inventory-Cost method A parent company acquired 100 percent of the stock of a subsidiary company on January 1, 2016, for $560,000. On this date, the balances of the subsidiary's stockholders' equity accounts were Common Stock, $35.000, Additional Paid-in Capital, $38.500, and Retained Earnings, $136,500. On the acquisition date, the excess was assigned to the following AAP assets: Original Amount Original Useful Life Property, plant & equipment $140.000 10 years Customer list 70.000 years Royalty agreement 56.000 3 years Goodwill 34,000 $350.000 The Goodwill asset has been tested annually for impairment, and has not been found to be impaired Assume the parent company sells inventory to its wholly owned subsidiary. The subsidiary, ultimately, sells the inventory to customers outside of the consolidated group. You have compiled the following data for the years ending 2018 and 2019 Inventory Gross Profit Remaining in Receivable Sales Unseld inventory (Payable 2019 542.000 55.600 Prepare consolidation spreadsheet for continuous sale of inventory-Cost method A parent company acquired 100 percent of the stock of a subsidiary company on January 1, 2016. for 560.000. On this date, the balances of the subsidiary's stockholders' equity accounts were Common Stock, 535,000, Additional Paid in Capital, 53,500 and Retained Earnings, 5136.500. On the acquisition date, the excess was assigned to the following Passes Original Aman Original Life Property plant &copment The Goodwill be tested for palement, and has not been found to be impaired ne te parent company els inventory to is wholly owned subsidiary. The subdiary mately well then try to customers outside of the comedated group. You have compled the following data for the years ending 2013 and 2017 tory sro Profil Remaining in Bacalle Und wery 2019 50.000 51.100 2013 57.350 510500 The carent solidation Equity investment The inventory not remaining at the end of a given year is sold to unaffiliated entities outside of the consolidated group during the next year. The parent uses the cost method of pre-consolidation Equity Investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2019. follow Paren Subsidiary Parent Subsidiary Income statement Balance sheet Sales 53.045.000 5560.000 Assets Cost of goods sold 36000 Cash 455.000 $175.000 Gross profit 510,000 224000 cc Operating expenses 1581.0001 60.000 escory SA DO Income from bradary 10 Equityinen Toti 5321500 584.000 Per plantet 2.000 Statement of retained caring DOW 1400.000 SO 400 Date Dends VO 116.50 Other current 1500 51.650.000 3337.000 Lonca 1.750.000 12000 100.000 35.000 ARC 1400 a. Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP) through December 31, 2019. Year ended December 31 2017 2018 $ 5 100% AAP Amortization - Dr (C) Property, plant and equipment (PPE).net Customer ist Royalty Agreement Goodwill et amortization 5 2018 December 31 2017 2018 $ 2019 Jan 100 Unamurthed AAP.Dron 2016 Property plant and equipment (PPE).net 5100.000 Customer List 70.000 Royalty Agreement Goodwill 1000 5 b. Compute the amount of the beginning of year IAD adjustment necessary for the consolidation of the financial statements for the year ended December 31, 2019. Do not use negative signs with your answers below. Chaith BOY 5 BOYtream c. Complete the consolidating entries according to the C-E-A-D-I sequence and complete the consolidation workshee Consolidation Journal Description Debit Credit [AD] [C] (4) [E] BOY Common stock (Subsidiary) BOY APIC (Subsidiary) [A] PPE.net Customer list Royalty Agreement [D] Customer List Royalty Agreement [cogs) To recognize prior year profit on intercompany sales, (sales) [icogs To defer current period profit on intercompany sales. Cipay . $ Use negative signs with answers in the Consolidated column for Cost of goods sold, Operating expenses and Dividends. Consolidation Worksheet Income statement Parent Subsidiary Debit Credit Consolidated Sales $3,045,000 $560,000 (sales) $ Cost of goods sold (2.135,000) (336,000) [lcogs) [lcogs) [Isales) Gross profit 910,000 224,000 Equity income 10,500 [C Operating expenses (581,000) (140,000) [D] Net income $339,500 $84.000 $ Statement of retained earnings BOY retained earnings $1,400,000 $283,500 [E] (ADJI $ Net income 339,500 84,000 Dividends (87,500) (10,500) [C] Ending retained earnings $1.652.000 $357.000 $ Balance sheet Assets Cash $455.000 $175,000 $ Accounts receivable 392,000 126,000 Cipay Inventory 595,000 175.000 [lcogs) Equity investment 560,000 (ADD) [E] [icogs) (A) PPE, net 2.800,000 294,000 (A) [D] Customer List [A] [D] Royalty Agreement (A) (D) Goodwill [A] $4,802.000 $770,000 $ $ Liabilities and equity Accounts payable Other currentliabilities Long-term liabilities Common stock APIC Retained earnings $245,000 280,000 1,750,000 490,000 385.000 1.652,000 $4,802,000 $70,000 payl 87.500 182,000 35,000 [E] 38,500 (E) 357.000 $770,000 $ $ $ Prepare consolidation spreadsheet for continuous sale of Inventory-Cost method A parent company acquired 100 percent of the stock of a subsidiary company on January 1, 2016, for $560,000. On this date, the balances of the subsidiary's stockholders' equity accounts were Common Stock, $35.000, Additional Paid-in Capital, $38.500, and Retained Earnings, $136,500. On the acquisition date, the excess was assigned to the following AAP assets: Original Amount Original Useful Life Property, plant & equipment $140.000 10 years Customer list 70.000 years Royalty agreement 56.000 3 years Goodwill 34,000 $350.000 The Goodwill asset has been tested annually for impairment, and has not been found to be impaired Assume the parent company sells inventory to its wholly owned subsidiary. The subsidiary, ultimately, sells the inventory to customers outside of the consolidated group. You have compiled the following data for the years ending 2018 and 2019 Inventory Gross Profit Remaining in Receivable Sales Unseld inventory (Payable 2019 542.000 55.600