Assume a parent company acquired 100% of a subsidiary on 1/1/X1 at a purchase price that was $300,000 in excess of the subsidiary’s book value. Of that excess, $200,000 was assigned to an unrecorded...

Assume a parent company acquired 100% of a subsidiary on 1/1/X1 at a purchase price that was $300,000 in excess of the subsidiary’s book value. Of that excess, $200,000 was assigned to an unrecorded patent that is being amortized over 10 years. The remaining $100,000 was assigned to goodwill. In the year X2, the subsidiary sold land to the parent for $100,000. The land was reported on the balance sheet of the subsidiary for $70,000 at the date of sale.

The financial statements for the parent and subsidiary for the year ended 12/31/X3 are attached in the Excel spreadsheet.

Submission Requirements:

Using the ACT470_Mod04-Option02.xlsx Excel spreadsheet in the Module 4 folder:

· Prepare the consolidated financial statements at 12/31/X3 by placing the appropriate entries in their respective debit/credit column cells.

· Indicate, in the blank column cell to the left of 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.

· 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.