***PLEASE SHOW CELL FORMULAS FOR SOLUTIONS****

Part 2: Problem Solving - Consolidated Financials Assume that on 1/1/XO, a parent company acquires a 70% interest in its subsidiary for a price at $480,000 over book value. The excess is assigned as follows: Asset Fair Value Useful Life Patent $320,000 8 years Goodwill 160,000 Indefinite 70% of the goodwill is allocated to the parent. Included in the attached Excel spreadsheet are the pre-consolidation financial statements for both the parent and the subsidiary. Submission Requirements: Using the ACT470_Mod08-Portfolio_Option01.xlsx Excel spreadsheet in the Module 8 folder: Prepare the consolidated financial statements at 12/31/X6 by placing the appropriate entries in their respective debit/credit column cells. Indicate, in the blank column cell to the left the debit and credit column cells if the entry is a [C], [E], [A], [D] or [I]entry. Use Excel formulas to derive the Consolidated column amounts and totals. o Using the Home key in Excel, go to the Styles area and highlight the [C], [E], [A], [D] or [I]entry cells in different shades. Consolidation Entries Dr Parent Subsidiary Cr Consolidated 2,000,000 (1,200,000) 800,000 Income Statement: Sales : Cost of Goods sold Gross profit = Income (loss) from subsidiary Operating expenses ) Net Income Consolidated Nl attrib to NCI Consolidated NI attrib to CI 6,000,000 (4,000,000) 2,000,000 112,000 (1,500,000) 612,000 (600,000) 200,000 0 0 0 0 0 0 0 0 3 Statement of Ret Earnings: 5 BOY retained earnings 6 Net income Dividends BEOY retained earnings 0 0 1,978,000 612,000 (190,000) 2,400,000 970,000 200,000 (100,000) 1,070,000 0 0 Balance Sheet: 1 Cash 2 Accounts receivable 3 Inventory 4 Equity investment 200,000 600,000 800,000 1,400,000 120,000 400,000 880,000 0 0 0 0 UI 5 2,000,000 1,200,000 7 PPE, net 3 Patent 3 Goodwill 0 0 0 0 5,000,000 2,600,000 2 Current liabilities 3 Long-term liabilities 4. Common stock 5 APIC 5 Retained earnings 7 Noncontrolling interest 500,000 1,100,000 600,000 400,000 2,400,000 200,000 600,000 280,000 450,000 1,070,000 0 0 0 0 0 0 3 3 5,000,000 2,600,000 0 ol 0