Equity Method and Ellminating Entries, Second Year

On January $1,2023,$ Playtel Inc. acquired all of the stock of San Jose Cable for $$600$ million in cash. At the date of acquisitlon, San Jose's shareholders'

equity accounts were as follows $($in thousands$)$:

Both companies have a December $31$ year$-$end. At the date of acquisition, San Jose's reported net assets had book values approximating fair value.

However, It had previously unreported Indefinite$-$life dible intangibles valued at $$156$ milllion, meeting ASC Topic $805$ requirements for

capitalization. Impairment losses in $2023$ for Identiflable intangibles were $$1,200000$ Goodwill from this acquisitlon was not impaired in $2023.$ San Jose

reported net income of $$7\mathrm{.}0$ million in $2023,$ and paid no dividends. Playtel uses the complete equity method to report its investment in San Jose on its

own books.

It is now December $31,2024,$ two years since the acquisition, In $2024,$ San jose reported net income of $$6\mathrm{.}0$ million and declared and paid dividends of

$$960,000.$ Impairment losses on the identiflable intangibles were $$2\mathrm{.}4$ million, and goodwill was impaired by $$1,440,000.$

Note: Provide all answers in thousands.

a$.$ Calculate equity in net income of San Jose for $2024,$ reported on Playtel's books

b$.$ Calculate the December $31,2024,$ Investment balance, reported on Playtel's books.

c$.$ Prepare eliminating entries $($C$),($E$),($R$),$ and $($O$),$ required to consolidate Playtel's trial balance accounts with those of San Jose on December $31,2024.$

Consolidated Income Statement

When Parson Company acquired all of Soaper Company's stock on July $1,2022,$ Soaper's inventory was undervalued by $$160,000,000,$ plant assets with a

$10-$year life were overvalued by $$200,000,000,$ and long$-$term debt which matures in flve years was overvalued by $$100,000,000.$ Goodwill arising from

the combination is not impaired. All of Soaper's depreciation and amortization charges are based on the straight$-$line method. The undervalued

inventory was sold during the year ended June $30,2023.$ The separate income statements of Parson and Soaper for the year ended June $30,2023,$ follow

$($amounts in millions$).$

Required

Prepare a consolidated income statement for Parson and Soaper for the year ended June $30,2023.$