Question 10: Assume a parent company acquires its subsidiary by paying $1,200,000 for all of the outstanding voting shares of the investee. On the acquisition date, subsidiary's assets and liabilities have individual fair values that equal their book values, except for property equipment with a fair value greater than book value by $150,000 and licenses with a fair value greater than book value by $250,000. The parent and subsidiary have the following balance sheets immediately after the acquisition, but before any push-down adjustments by the subsidiary: Parent Subsidiary Assets Cash & receivables $ 800.000 $ 100,000 Inventory 600,000 200.000 Property & equipment, net 2.300.000 775.000 Equity investment 1.200.000 Licenses 25,000 $4.900,000 $1,100,000 Liabities and stockholders' equity Current liabilities $ 400,000 $150,000 Other abilities 00.000 Noto payablo 350,000 Common stock 1.670,000 100,000 APIC 1.430,000 200.000 Retained earnings 1.100.000 300.000 54,900,000 51,100,000 a. Compute the amount of goodwill implicit in the acquisition of the subsidiary. b. Assume the subsidiary elects to apply pushdown accounting immediately after the above financial statements were prepared. Provide the journal entries required for the subsidiary to apply pushdown accounting. c. Prepare the consolidation entry or entries on the date of acquisition, assuming the subsidiary applied pushdown accounting. d. Prepare the consolidated balance sheet on the date of acquisition