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Question 5 Not complete Marked out of 10.00 P Flag question Balance sheet Determining ending consolidated balances in the second year following the acquisition-cost method

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Question 5 Not complete Marked out of 10.00 P Flag question Balance sheet Determining ending consolidated balances in the second year following the acquisition-cost method Assume a parent company acquired a subsidiary on January 1, 2018, for $1,200,000. The purchase price was $650,000 in excess of the subsidiary's $550,000 book value of Stockholders' Equity on the acquisition date. Of this excess purchase price, $250.000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $400,000 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $280,000. 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, are as follows: Parent Subsidiary Parent Subsidiary Income statement Sales $5,000,000 $1,200,000 Assets Cost of goods sold (3,000,000) (700,000) Cash $800,000 $150,000 Gross profit 2,000,000 500,000 Accounts receivable 1,000,000 340,000 Equity income 40,000 Inventory 1,600,000 500,000 Operating expenses (1,500,000) (400,000) Equity investment 1,200,000 Net income $540,000 $100,000 Property, plant & equipment 3,000,000 900,000 Statement of retained earnings $7,600,000 $1,890,000 BOY retained earnings 1,500,000 600,000 Liabilities and stockholders' equity Net income 540,000 100,000 Accounts payable $700,000 $140,000 Dividends (200,000) (40,000) Accrued liabilities 900,000 220,000 Ending retained earnings $1,840,000 $660,000 Long-term liabilities 2,500,000 600,000 Common stock 500,000 120,000 APIC 1,160,000 150,000 Retained earnings 1,840,000 660,000 $7,600,000 $1,890,000 At what amount will the following accounts appear on the consolidated financial statements? Do not use negative signs with any of your answers. a. Sales $ 0 0 $ $ $ 0 0 TA 0 b. Investment income c. Operating expenses $ d. Inventories $ e. Equity investment $ f. Property, plant & equipment, net $ g. Goodwill $ h. Common stock $ i. Retained earnings $ 0 0 $ 0 0 of

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