Parent Corporation paid $400,000 cash for 90% of SubsidiaryCorporation’s common stock on January 1,

Parent Corporation paid $400,000 cash for 90% of SubsidiaryCorporation’s common stock on January 1, 2006, when Subsidiary had $300,000 capital stock and $100,000 retainedearnings. Th book value of Subsidiary’s

assets and liabilities were equal to fair values. During 2006,Subsidiary reported net income of $20,000 and

declared $10,000 in dividends on December 31. Balance sheets forParent and Subsidiary at December 31, 2006,

are as follows (in thousands):

Parent Subsidiary

Assets

Cash$                             42$                           20

Receivable – net 50 130 Inventories 400 50

Land 150 200

Equipment – net 600 100

Investment in Subsidiary 409

$                         1,651$                         500

Liabilities and Equity

Accounts payable 410 80

Dividends payable 60 10

Capital stock 1000 300

Retained earnings 181 110

$                         1,651$                         500

Required:

1. Prepare consolidated balance sheet working papers for ParentCorporation and Subsidiary for December 31,2006. . . .

"Is this question part of your assignment? We can help"

ORDER NOW