Prepare consolidation spreadsheet for intercompany sale of equipment-Cost method Assume that a parent company acquired a subsidiary on January 1, 2012 for $892,000. The purchase price was $359,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. On the acquisition date, the subsidiary's stockholders equity was comprised of $390,000 of no-par common stock and $143,000 of retained earnings. The Acquisition Accounting Premium (AAP) was assigned as follows: an increase of $33,000 in accounts receivable that were entirely collected during the year after acquisition, an increase of $65,000 for property, plant and equipment that has 10 years of remaining useful life, $124,000 for an unrecorded patent with an 8-year remaining life and $137,000 for goodwill. All amortizable components of the AAP are amortized using the straight-line method. On January 1, 2014, the parent sold Equipment to the subsidiary for a cash price of $134,700. The parent had acquired the equipment at a cost of $130,800 and depreciated the equipment over its 12 -year useful life using the straight-line method (no salvage value). The parent had depreciated the equipment for 2 years at the time of sale. The subsidiary retained the depreciation policy of the parent and depreciates the equipment over its remaining 10-year useful life. Following are financial statements of the parent and its subsidiary as of December 31, 2016. The parent uses the cost method of pre-consolidation investment bookkeeping. Subsidiary b. Compute the remaining portion of the deferred gain at January 1, 2016 . $ method instead of the cost method of pre-consolidation bookkeeping. f. Prepare the consolidation spreadsheet for the year ended December 31, 2016. Total expenses) and Dividends. of the cost method of pre-consolidation bookkeeping. Do not use negative signs with your answers below. e. Prepare the consolidation entries for the year ended December 31, 2016. \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline Patent & & & [A] & & & [D] & \\ \hline Goodwill & - & - & {[A]} & & & & \\ \hline Total assets & 2,140,000 & $975,000 & & & & & $ \\ \hline Liabilities \& stockholders' & & & & & & & \\ \hline Accounts payable & $325,000 & $70,200 & & & & & $ \\ \hline Accrued liabilities & 32,500 & 59,800 & & & & & \\ \hline Notes payable & 195,000 & 78,000 & & & & & \\ \hline Common stock & 840,000 & 390,000 & [E] & & & & \\ \hline EOY Retained earnings & 747,500 & 377,000 & & - & - & & \\ \hline Total liabilities and equity & $2,140,000 & $975,000 & & $ & $ & & $ \\ \hline \end{tabular} Check Prepare consolidation spreadsheet for intercompany sale of equipment-Cost method Assume that a parent company acquired a subsidiary on January 1, 2012 for $892,000. The purchase price was $359,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. On the acquisition date, the subsidiary's stockholders equity was comprised of $390,000 of no-par common stock and $143,000 of retained earnings. The Acquisition Accounting Premium (AAP) was assigned as follows: an increase of $33,000 in accounts receivable that were entirely collected during the year after acquisition, an increase of $65,000 for property, plant and equipment that has 10 years of remaining useful life, $124,000 for an unrecorded patent with an 8-year remaining life and $137,000 for goodwill. All amortizable components of the AAP are amortized using the straight-line method. On January 1, 2014, the parent sold Equipment to the subsidiary for a cash price of $134,700. The parent had acquired the equipment at a cost of $130,800 and depreciated the equipment over its 12 -year useful life using the straight-line method (no salvage value). The parent had depreciated the equipment for 2 years at the time of sale. The subsidiary retained the depreciation policy of the parent and depreciates the equipment over its remaining 10-year useful life. Following are financial statements of the parent and its subsidiary as of December 31, 2016. The parent uses the cost method of pre-consolidation investment bookkeeping. Subsidiary b. Compute the remaining portion of the deferred gain at January 1, 2016 . $ method instead of the cost method of pre-consolidation bookkeeping. f. Prepare the consolidation spreadsheet for the year ended December 31, 2016. Total expenses) and Dividends. of the cost method of pre-consolidation bookkeeping. Do not use negative signs with your answers below. e. Prepare the consolidation entries for the year ended December 31, 2016. \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline Patent & & & [A] & & & [D] & \\ \hline Goodwill & - & - & {[A]} & & & & \\ \hline Total assets & 2,140,000 & $975,000 & & & & & $ \\ \hline Liabilities \& stockholders' & & & & & & & \\ \hline Accounts payable & $325,000 & $70,200 & & & & & $ \\ \hline Accrued liabilities & 32,500 & 59,800 & & & & & \\ \hline Notes payable & 195,000 & 78,000 & & & & & \\ \hline Common stock & 840,000 & 390,000 & [E] & & & & \\ \hline EOY Retained earnings & 747,500 & 377,000 & & - & - & & \\ \hline Total liabilities and equity & $2,140,000 & $975,000 & & $ & $ & & $ \\ \hline \end{tabular} Check