Assume that your company acquired a subsidiary on January 1, 2012. The purchase

Question

Assume that your company acquired a subsidiary on January 1, 2012. The purchase price was $600,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following [A] assets: The AAP asset relating to undervalued PPE with a 20-year useful life has been depreciated as part of the parent's equity method accounting. The financial statements of the parent and its subsidiary for the year ended December 31, 2013, are as follows: At what amount will the following accounts appear on the consolidated financial statements?

Explanation / Answer

Consolidated Financial statement Details Amount Remarks Sales         6,700,000.00 =5500000+1200000 Equity Income                                -   Intercompany income eliminated Operating Expense       (1,137,000.00) =-825000-312000 Accounts Receivable         1,686,400.00 =1408000+278400 Equity Investment                              -   Intercompany Investment eliminated PPE net       12,326,650.00 =11365200+661600+300000-15000 Goodwill             300,000.00 Indefimite life intangible Common Stock             512,450.00 Retained Earning         4,559,200.00 =4406200+168000-15000

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