Subsidiary Acquired at Net Book Value
On December 31, 20X8, Banner Corporation acquired 80 percent of Dwyer Company’s common stock for $136,000. At the acquisition date, the book values and fair values of all of Dwyer’s assets and liabilities were equal. Banner uses the equity method in accounting for its investment. Balance sheet information provided by the companies at December 31, 20X8, is as follows:
| Banner Corporation | Dwyer Company |
Cash | $ 74,000 | $ 20,000 |
Accounts Receivable | 120,000 | 70,000 |
Inventory | 180,000 | 90,000 |
Fixed Assets (net) | 350,000 | 240,000 |
Investment in Dwyer Company Stock | 136,000 |
|
Total Debits | $860,000 | $420,000 |
Accounts Payable | $ 65,000 | $ 30,000 |
Notes Payable | 350,000 | 220,000 |
Common Stock | 150,000 | 90,000 |
Retained Earnings | 295,000 | 80,000 |
Total Credits | $860,000 | $420,000 |
Required
Prepare a consolidated balance sheet for Banner at December 31, 20X8.
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