Subsidiary, Inc. Corporation’s trial balance is as follows:

	Subsidiary, Inc. Dr (Cr)
Cash and receivables	$ 200
Inventories	600
Property, plant, and equipment, net	7,500
Liabilities	(7,600)
Capital stock	(720)
Retained deficit	20
	$ 0

An analysis of Subsidiary, Inc.’s assets and liabilities reveals that its inventories are overvalued by $100 and its property, plant and equipment is overvalued by $3,000. In addition, the following items are not currently reported on Subsidiary, Inc.’s balance sheet:

• Customer contracts, valued at $30
• In-process research and development, valued at $200
• Expected future warranty liabilities with a present value of $15

Additional data:

• Parent Corp. issues new stock with a market value of $700 to acquire the assets and liabilities of Subsidiary, Inc.
• Stock registration fees are $50, paid in cash.
• Consulting, accounting, and legal fees connected with the merger are $100, paid in cash.
• Parent Corp. enters into an earnings contingency agreement, whereby Parent Corp. will pay the former shareholders of Subsidiary, Inc. an additional amount if Subsidiary, Inc.’s performance meets certain minimum levels. The present value of the contingency is estimated at $25.

a. Prepare the journal entry or entries Parent Corp. makes to record the acquisition.

b. Prepare consolidation eliminating entries (E) and (R) necessary to consolidate at the date of acquisition.