Assume that a parent company acquires its subsidiary on 1/1/xx, by exchanging 41,500 shares of its $1 par value common stock, with a market value on acquisition date of $36 per share, for all of the outstanding voting shares of the subsidiary. you have been charged with preparing the consolidation of these two entities at 12/31/xx. on acquisition date (1/1/xx), all of the subsidiary’s assets and liabilities had fair values equaling their book values except ppe assets are undervalued by $81,000 (depreciation =$5,400 per year), the subsidiary has an unrecorded patent with a fair value of $261,000 (amortization = $32,625 per year) and the parent records $162,000 of goodwill in the transaction. submission requirements:

The total Asset is $531,225, The total owners Equity is $1,494,000

Explanation:

A balance sheet is a summary of debit and credit balances of asset and liabilities in a ledger. It is a financial statement prepared in order to determine the financial position of a business, in the event of acquisition of a subsidiary by a parent company, then a consolidated balance sheet will be prepared to unite the two entities. A consolidated balance sheet is a financial statement prepared to record the asset and liabilities of the two entities as one entity.in this case the aquisi

Consolidated Balance Sheet As At 1/1/××

$ $

Fixed Asset

PPE Asset (undervalued ) 81,000

Less : Depreciation. 5,400

75,600

Goodwill. 162,000

Total Fixed Asset 237,600

Other Asset

Patent. 261,000

Amortization. 32,625

293,625

Total Asset. 531,225

Owners Equity

Common Stock 1,494,000

Total owners Equity 1,494,000

the correct option is c

whats the question fjefjejfejfegrgrgrg