Homework Answers
| Following account at consolidated balance sheet | |||||
| appear as below: | Working: | ||||
| No. | Ledger | Amount | Parent | Subsidiary | |
| a | Sales | 6200000 | 5000000 | 1200000 | |
| b | Investment income | 40000 | 40000 | 0 | |
| c | Operating expense | 1900000 | 1500000 | 400000 | |
| d | Inventories | 2100000 | 1600000 | 500000 | |
| e | Eq investment | 550000 | 550000 | 0 | |
| f | Property (net) | 4125000 | 3225000 | 900000 | |
| g | Good will | 400000 | 400000 | 0 | |
| h | Common stock | 620000 | 500000 | 120000 | |
| i | Retain earning | 2500000 | 1840000 | 660000 | |
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on the acquisition date, and that excess
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Determining ending consolidated balances in the second
year following the acquisition—Equity
method
Assume a parent company acquired a subsidiary on January 1,
2015. The purchase price was $745,000
in excess of the subsidiary’s book value of Stockholders’ Equity
on the acquisition date, and that excess
was assigned to the following [A] assets:
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