On January 1, 2020, Parent Company purchased 80% of the common stock of Subsidiary Company for $320,000. · On this date, Subsidiary had common stock, other paid-in capital, and retained earnings of $40,000, $120,000, and $190,000, respectively. · Net income and dividends for Subsidiary Company were $50,000 and $10,000, respectively. · Parent Company has used the simple equity method for recording the Subsidiary income and dividends. · On January 1, 2020, the only tangible assets of Subsidiary that were undervalued were inventory and equipment. Inventory was worth $5,000 more than cost. Equipment, which was worth $15,000 more than book value, has a remaining life of 5 years, and straight-line depreciation is used. Any remaining excess is goodwill. The following trial balances of the two companies are prepared on December 31, 2020. a. Prepare the Value Analysis table and the Determination and Distribution of Excess schedule table. b. Prepare all the eliminations and adjustments that would be made on the 2020 consolidated worksheet. c. Prepare the Income Distribution Schedules for Subsidiary and Parent. d. Prepare the consolidated worksheet. e. Prepare the 2020 consolidated income statement and balance sheet. Please do answer all subparts a,b,c,d,e.if answered within 1hr,it would be helpful.i will upvote
On January 1, 2020, Parent Company purchased 80% of the common stock of Subsidiary Company for $320,000.
· On this date, Subsidiary had common stock, other paid-in capital, and
· Net income and dividends for Subsidiary Company were $50,000 and $10,000, respectively.
· Parent Company has used the simple equity method for recording the Subsidiary income and dividends.
· On January 1, 2020, the only tangible assets of Subsidiary that were undervalued were inventory and equipment. Inventory was worth $5,000 more than cost. Equipment, which was worth $15,000 more than book value, has a remaining life of 5 years, and straight-line
The following
a. Prepare the Value Analysis table and the Determination and Distribution of Excess schedule table.
b. Prepare all the eliminations and adjustments that would be made on the 2020 consolidated worksheet.
c. Prepare the Income Distribution Schedules for Subsidiary and Parent.
d. Prepare the consolidated worksheet.
e. Prepare the 2020 consolidated income statement and
Please do answer all subparts a,b,c,d,e.if answered within 1hr,it would be helpful.i will upvote
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