A parent acquires its subsidiary on January 1, 2019, at a cost that exceeds the subsidiary's book value by $10,000. The subsidiary's assets and liabilities are reported at amounts approximating book value, and there are no previously unreported assets or liabilities. Goodwill from the acquisition is impaired by $300 in 2019 and $100 in 2020. The subsidiary reports net income of $4,500 in 2019 and $3,200 in 2020. The subsidiary has no other comprehensive income and declares no dividends during 2019 or 2020.

On the consolidation working paper at December 31, 2020, eliminating entry (A) includes a debit to the investment in subsidiary account in the amount of:
A. $7,700
B. $4,500
C. $4,200
D. $7,300

$7300 ( D )

Explanation:

Given the following data

subsidiary net income are

= $4500 for 2019

= $3200 for 2020

Goodwill form acquisitions are

= $300 for 2019

= $100 for 2020

on the consolidation working paper at the end of 2020 when entry A is eliminated

The subsidiary account will be recorded with the amount of

= subsidiary net incomes - goodwill from acquisitions

= ( $4500 - $300 ) + ( $3200 - $100 )

= $4200 + $3100

= $7300

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o