Following are selected accounts for Mergaronite Company and Hill, Inc., as of December 31, 2013. Several of Mergaronite€™s accounts have been omitted. Credit balances are indicated by parentheses.

Assume that Mergaronite took over Hill on January 1, 2009, by issuing 7,000 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2009, Hill€™s land was undervalued by $20,000, its buildings were overvalued by $30,000, and equipment was undervalued by $60,000. The buildings had a 10-year life; the equipment had a 5-year life. A customer list with an appraised value of $100,000 was developed internally by Hill and was to be written off over a 20-year period.
a. Determine and explain the December 31, 2013, consolidated totals for the following accounts:
Revenues
Amortization Expense
Customer List
Cost of Goods Sold
Buildings
Common Stock
Depreciation Expense
Equipment
Additional Paid-In Capital
b. In requirement (a), why can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary?
c. If the parent uses the equity method, what consolidation entries would be used on a 2013worksheet?

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Mergaronite Hill Revenues Cost of goods sold Depreciation expense··· Investment income Retained earnings, 1/1/13 Dividends paid. Current assets Land Buildings (net) Equipment (net) Liabilities Common stock Additional paid-in capital $(600,000) $(250,000) 100,000 50,000 NA (900,000) (600,000) 40,000 690,000 90,000 140,000 250,000 (400,000)(310,000) (40,000) (50,000) (160,000) 280,000 120,000 Not given 130,000 200,000 300,000 500,000 200,000 (300,000)