Parent Corporation acquired 90 percent of the outstanding voting stock of Subsidiary, Inc., on January 1, 2020, whenSubsidiary had a net book value of $610,000. Any excess fair value was assigned to intangible assets and amortized ata rate of $4,000 per year.Parent's 2021 net income before consideration of its relationship with Subsidiary (and before adjustments for intra-entitysales) was $510,000. Subsidiary reported net income of $320,000. Parent declared $200,000 in dividends during thisperiod; Subsidiary paid $61,000. At the end of 2021, selected figures from the two companies' balance sheets were asfollows:Parent Subsidiary$350,000 $111,000810,000 410,000Equipment (net) 610,000 510,000InventoryLandIn 2020, Subsidiary sold land costing $51,000 to Parent for $92,000. On the 2021 consolidated balance sheet, whatvalue should be reported for land?Complete this question by entering your answers in the tabs below.RequiredOn the 2021 consolidated balance sheet, what value should be reported for land?Consolidated landbalance< Requirednext >

The consolidated balance sheet is used to show the financial position of the parent company as well…

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Required On the 2021 consolidated balance sheet, what value should be reported for land?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Parent Corporation acquired 90 percent of the outstanding voting stock of Subsidiary, Inc., on January 1, 2020, when
Subsidiary had a net book value of $610,000. Any excess fair value was assigned to intangible assets and amortized at
a rate of $4,000 per year.
Parent's 2021 net income before consideration of its relationship with Subsidiary (and before adjustments for intra-entity
sales) was $510,000. Subsidiary reported net income of $320,000. Parent declared $200,000 in dividends during this
period; Subsidiary paid $61,000. At the end of 2021, selected figures from the two companies' balance sheets were as
follows:
Parent Subsidiary
$350,000 $111,000
810,000 410,000
Equipment (net) 610,000 510,000
Inventory
Land
In 2020, Subsidiary sold land costing $51,000 to Parent for $92,000. On the 2021 consolidated balance sheet, what
value should be reported for land?
Complete this question by entering your answers in the tabs below.
Required
On the 2021 consolidated balance sheet, what value should be reported for land?
Consolidated land
balance
< Required
next >

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