Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company...

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Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2021, for $1,020,000. The purchase price was $552,500 in excess of the subsidiary's $467,500 book value of Stockholders' Equity on the acquisition date. Of this excess purchase price, $212,500 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $340,000 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $238,000. 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, 2022, 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 h. Common stock i. Retained earnings $4,250,000 $1,020,000 Assets (2,550,000) (595,000) Cash 1,700,000 34,000 (1,275,000) $459,000 1,275,000 459,000 (170,000) $1,564,000 $ $ Balance sheet 425,000 Accounts receivable Inventory (340,000) Equity investment $85,000 Property, plant & equipment, net 510,000 Liabilities and stockholders' equity 85,000 Accounts payable (34,000) Accrued liabilities $561,000 Long-term liabilities Common stock APIC Retained earnings 0 0 0 0 At what amount will the following accounts appear on the consolidated financial statements? Do not use negative signs with any of your answers. a. Sales $ b. Investment income $ c. Operating expenses $ d. Inventories $ e. Equity investment $ f. Property, plant & equipment, net $ g. Goodwill 0 0 0 0 0 $680,000 $127,500 850,000 289,000 425,000 1,360,000 1,020,000 2,550,000 765,000 $6,460,000 $1,606,500 $595,000 $119,000 765,000 187,000 2,125,000 510,000 425,000 102,000 986,000 127,500 1,564,000 561,000 $6,460,000 $1,606,500 Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2021, for $1,020,000. The purchase price was $552,500 in excess of the subsidiary's $467,500 book value of Stockholders' Equity on the acquisition date. Of this excess purchase price, $212,500 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $340,000 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $238,000. 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, 2022, 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 h. Common stock i. Retained earnings $4,250,000 $1,020,000 Assets (2,550,000) (595,000) Cash 1,700,000 34,000 (1,275,000) $459,000 1,275,000 459,000 (170,000) $1,564,000 $ $ Balance sheet 425,000 Accounts receivable Inventory (340,000) Equity investment $85,000 Property, plant & equipment, net 510,000 Liabilities and stockholders' equity 85,000 Accounts payable (34,000) Accrued liabilities $561,000 Long-term liabilities Common stock APIC Retained earnings 0 0 0 0 At what amount will the following accounts appear on the consolidated financial statements? Do not use negative signs with any of your answers. a. Sales $ b. Investment income $ c. Operating expenses $ d. Inventories $ e. Equity investment $ f. Property, plant & equipment, net $ g. Goodwill 0 0 0 0 0 $680,000 $127,500 850,000 289,000 425,000 1,360,000 1,020,000 2,550,000 765,000 $6,460,000 $1,606,500 $595,000 $119,000 765,000 187,000 2,125,000 510,000 425,000 102,000 986,000 127,500 1,564,000 561,000 $6,460,000 $1,606,500

Answer rating: 100% (QA)

Sales 10208750 Investment income 0 Operating expenses 1844940 Inventories 3917500 Equity investment ... View the full answer