Problem 1 Data
Consolidated Financial Statements for the Year Ended December 31, 2022
	Parsley		Sage		Consolidated
Income Statement:
Sales	$ 1,600,000		$ 260,000		$ 1,860,000
Cost of Goods Sold	(1,200,000)		(115,000)		(1,315,000)
Gross Profit	400,000		145,000		545,000
Equity Income	70,000		-		-
Operating Expenses	(270,000)		(50,000)		(345,000)
Net Income	$ 200,000		$ 95,000		$ 200,000
Statement of Retained Earnings:
Beginning Retained Earnings	$ 1,150,000		$ 125,000		$ 1,150,000
Net Income	200,000		95,000		200,000
Dividends	(50,000)		(20,000)		(50,000)
Ending Retained Earnings	$ 1,300,000		$ 200,000		$ 1,300,000
Balance Sheet:
Assets:
Cash	$ 260,000		$ 120,000		$ 380,000
Accounts Receivable	420,000		180,000		600,000
Inventory	630,000		210,000		840,000
Equity Investment	600,000		-		-
Property, Plant & Equipment, net	2,300,000		225,000		2,555,000
License Agreement	-		-		15,000
Goodwill	-		-		200,000
	$ 4,210,000		$ 735,000		$ 4,590,000
Liabilities and Stockholders' Equity:
Accounts Payable	$ 160,000		$ 100,000		260,000
Accrued Liabilities	200,000		120,000		320,000
Long-Term Liabilities	1,400,000		160,000		1,560,000
Common Stock	250,000		25,000		250,000
APIC	900,000		130,000		900,000
Retained Earnings	1,300,000		200,000		1,300,000
	$ 4,210,000		$ 735,000		$ 4,590,000

Questions:

c. Show the detailed calculations arriving at each of the following accounts at December 31, 2022:

i. Consolidated Property, Plant and Equipment, net

ii. Consolidated License Agreement

iii. Consolidated Retained Earnings

d. What is the relationship between Parsleys Net Income and Consolidated Net Income? Why?

Parsley Parent acquired 100% of Sage Subsidiary on January 1, 2018. The purchase price was $370,000 in excess of Sage's book value of Stockholders Equity on the acquisition date. Such excess was assigned to the following assets: Selected accounts from the parent, subsidiary and consolidated financial statements for the year ended December 31 , 2022 can be found in the accompanying Excel file. Parsley Parent acquired 100% of Sage Subsidiary on January 1, 2018. The purchase price was $370,000 in excess of Sage's book value of Stockholders Equity on the acquisition date. Such excess was assigned to the following assets: Selected accounts from the parent, subsidiary and consolidated financial statements for the year ended December 31 , 2022 can be found in the accompanying Excel file