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Consolidation on date of acquisition - Equity method with noncontrolling interest and AAP Assume that a parent company acquires an 80% interest in its subsidiary for a purchase price of $3,724,800. The excess of the total fair value of the controlling and noncontrolling interests over the book value of the subsidiary's Stockholders' Equity is assigned to a building in PPE, net) that the parent believes is worth $100,000 more than its book value, an: unrecorded Patent that the parent valued at $200,000, and Goodwill of $300,000, 80% of which is allocated to the parent. The parent and the subsidiary report the balance sheets on the acquisition date in b. below: a. Prepare the consolidation entries on the acquisition date. Consolidation Worksheet Description Debit Credit [E] Common stock 0 0 APIC 0 0 0 0 0 Equity investment 0 0 0 0 0 [A] PPE, net Patent 0 0 0 0 Equity investment 0 0 0 0 b. Prepare the consolidation spreadsheet on the acquisition date. Elimination Entries Dr Cr Consolidated $ 0 Cash Parent Subsidiary $920,753 $215,152 725,760 331,296 1,099,980 425,544 1,241,600 Accounts receivable Inventory Equity investment 0 0 0 0 [E] O [A] 0 0 0 0 0 0 $ 0 Patent Goodwill PPE, net Total Assets Current liabilities Long-term liabilities Common stock APIC Noncontrolling interest [A] [A] 5,291,244 787,304 (A) $9,279,337 $1,759,296 $814,779 $331,296 4,000,000 476,000 927,045 95,200 [E] 688,905 119,000 [E] $ 0 0 0 oo 0 0 0 [E] 0 [A] 0 Retained earnings 2,848,608 737,800 (E) Total Liabilities and Equity $9,279,337 $1,759,296 0 0 0 0 $ 0