Question

Parent acquired 100% of Subsidiary on December 31, 20X0, when its net book values and fair values were as follows. Note Note Receivable Payable Term Interest rate 4.20% 4.50% 7 7 Excess Remaining useful life of equipment 10 Remaining useful life of patent 5 December 31, 20X0 Book Value Fair Value Cash $ 98,000 $ 98,000 $ Other assets 405,000 405,000 Equipment 969,000 870,000 Accumulated depreciation (300,000) Note receivable 66,000 62,000 Patent 89,000 107,000 Goodwill 101,200 Total $ 1,327,000 $1,643,200 $ 201,000 (4,000) 18,000 101,200 316,200 Accounts payable Other liabilities Note payable Common stock Additional paid-in capital Retained earnings Total 293,000 293,000 169,000 169,000 106,000 99,600 169,000 1,081,600 513,000 77,000 $ 1,327,000 $ 1,643,200 (6,400) 322,600 316,200 Determine the following consolidated balances at December 31, 20X1. Parent uses the equity method. Parent Subsidiary Consolidated Interest income 5,500 2.772 Depreciation expense 84,000 66.900 Amortization expense 17.800 Interest expense 20,000 4.770 Net income 97,500 58,302 Dividends declared 24.000 15,000 Equipment 1,271,000 1,017,000 Accumulated depreciation (459,000) (366,900) Patent 71,200 Note receivable 122.000 57,694 Note payable 394,000 92.782

Please show your work if possible

Answer 1

Calculation of consolidated balance sheet at December 31 20x1

the consolidated balance calculated on given data ,

E 1 2 2 3 4 5 6 7 А B с D calculation of consolidated balance sheet Items Parent Subsidiaries Consolidated Interest income 5,500 2772 8,272 Depreciation exp 84000 66900 150900 Amortization exp 17800 17800 Interest expense 20000 4770 24770 Net income 97500 58302 155802 Dividend declare 24000 15000 39000 Equipment 1,271,000 1,017,000 2,288,000 Accumulated der -459,000 -366,900 -825,900 Patent 71200 71200 Note receivable 122,000 57694 179,694 Note payable 394,000 92782 486,782 8 9 10 11 12 13

Thank you.