Homework Answers
A.) Total Fair Value of the Subsidiary on the acquisition date.
| Description | Amount |
| Total Asset | $ 1,973,000 |
| Accounts Payable | ($127,000) |
| Accrued Liabilities | ($ 221,000) |
| Long Term Liabilities | ( $ 500,000) |
| Total Fair Value | $ 1,125,000 |
B.)
Consolidation Worksheet
| Description | Debit | Credit |
| Common Stock | $ 100,000 | |
| APIC | $ 125,000 | |
| Retained Earnings | $ 900,000 | |
| Equity Investment | $ 1,125,000 |
C.)
Consolidated Balancesheet
| Eliminating Entries | |||||
| Balancesheet | Parent | Subsidiary | Dr. | Cr. | Consolidated |
| Asset | |||||
| Cash | $ 405,000 | $ 226,000 | $631,000 | ||
| Accounts Receivable | $1,280,000 | $348,000 | $1,628,000 | ||
| Inventory | $1,940,000 | $447,000 | $2,387,000 | ||
| Equity Investment | $1,125,000 | 0 | 0 | $1,125,000 | 0 |
| Property,Plant&equipment (PPE), Net | $9,332,000 | $952,000 | $ 10,284,000 | ||
| Total | $14,082,000 | $1,973,000 | $14,930,000 | ||
| Liabilities and Stockholders Equity | |||||
| Accounts Payable | $627,000 | $127,000 | $754,000 | ||
| Accrued Liabilities | $736,000 | $221,000 | $957,000 | ||
| Long Term Liabilities | $3,000,000 | $ 500,000 | $3,500,000 | ||
| Common Stock | $1370,000 | $ 100,000 | $100,000 | $1,370,000 | |
| APIC | $3,325,000 | $ 125,000 | $125,000 | $3,325,000 | |
| Retained Earnings | $5,024,000 | $900,000 | $900,000 | $5,024,000 | |
| $14,082,000 | $1,973,000 | $1,125,000 | $1,125,000 | $14,930,000 | |
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