Please answer retained earnings Determining ending consolidated balances in the second year following the acquisition-Cost methodAssume a parent company acquired a subsidiary on January 1, 2015, for $2,086,000. The purchase price was $966,200 in excess of the subsidiary's $1,119,800 book value of Stockholders' Equity on the acquisition date. Of thisexcess purchase price, $502,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $464,200 was assigned to Goodwill. On the acquisition date, the subsidiary reported retainedearnings equal to $847,550. The parent uses the cost method of pre-consolidation Equity investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2016, are as follows:Parent SubsidiaryParent SubsidiaryIncome statementSalesCost of goods soldGross profitEquity incomeOperating expensesNet incomeStatement of retained earningsBOY retained earningsNet incomeDividendsEnding retained earningsa. Salesb. Investment incomec. Operating expensesd. InventoriesBalance sheet$8,318,750 $1,890,000 Assets(5,989,500) (1,089,000) Cash2,329,25037,400Retained earnings801,000 Accounts receivableInventory(1,247,840) (546,900) Equity investment$1,118,810 $254,100 Property, plant & equipment, net5,801,0701,118,810 254,100 Accounts payable(262,570) (37,400) Accrued liabilities$6,657,310 $1,154,450Long-term liabilitiesCommon stockAPICRetained earnings937,750 Liabilities and stockholders' equity1,844,9403,917,500✔At what amount will the following accounts appear on the consolidated financial statements?Do not use negative signs with any of your answers.$10,208,750 ✓$0✔$$e. Equity investment$f. Property, plant & equipment, net $g. Goodwill$h. Common stock$i.$0 ✓18,591,970464,200✔925,060$1,567,280 $468,6002,462,900 421,3003,376,850540,6502,086,0000 x17,189,920 1,000,450$26,682,950 $2,431,000$1,217,9201,447,270$173,030226,27010,587,500925,0605,847,8906,657,310 1,154,450$26,682,950 $2,431,000605,000121,000151,250

Given in the question: For the year end on December 31, 2016 Parent Subsidiary…

Answered: Please answer retained earnings

Business

Accounting

Please answer retained earnings

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Please answer retained earnings

Determining ending consolidated balances in the second year following the acquisition-Cost method
Assume a parent company acquired a subsidiary on January 1, 2015, for $2,086,000. The purchase price was $966,200 in excess of the subsidiary's $1,119,800 book value of Stockholders' Equity on the acquisition date. Of this
excess purchase price, $502,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $464,200 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained
earnings equal to $847,550. The parent uses the cost method of pre-consolidation Equity investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2016, are as follows:
Parent Subsidiary
Parent Subsidiary
Income statement
Sales
Cost of goods sold
Gross profit
Equity income
Operating expenses
Net income
Statement of retained earnings
BOY retained earnings
Net income
Dividends
Ending retained earnings
a. Sales
b. Investment income
c. Operating expenses
d. Inventories
Balance sheet
$8,318,750 $1,890,000 Assets
(5,989,500) (1,089,000) Cash
2,329,250
37,400
Retained earnings
801,000 Accounts receivable
Inventory
(1,247,840) (546,900) Equity investment
$1,118,810 $254,100 Property, plant & equipment, net
5,801,070
1,118,810 254,100 Accounts payable
(262,570) (37,400) Accrued liabilities
$6,657,310 $1,154,450
Long-term liabilities
Common stock
APIC
Retained earnings
937,750 Liabilities and stockholders' equity
1,844,940
3,917,500✔
At what amount will the following accounts appear on the consolidated financial statements?
Do not use negative signs with any of your answers.
$
10,208,750 ✓
$
0✔
$
$
e. Equity investment
$
f. Property, plant & equipment, net $
g. Goodwill
$
h. Common stock
$
i.
$
0 ✓
18,591,970
464,200✔
925,060
$1,567,280 $468,600
2,462,900 421,300
3,376,850
540,650
2,086,000
0 x
17,189,920 1,000,450
$26,682,950 $2,431,000
$1,217,920
1,447,270
$173,030
226,270
10,587,500
925,060
5,847,890
6,657,310 1,154,450
$26,682,950 $2,431,000
605,000
121,000
151,250

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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