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  3. a subsidiary is acquired on january 1, 2019 for $1

A subsidiary is acquired on January 1, 2019 for $10,000. The subsidiary's book value at...

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A subsidiary is acquired on January 1, 2019 for $10,000. The subsidiary's book value at the date of acquisition was $2,000. Following is revaluation information for the subsidiary's identifiable net assets at the date of acquisition: Fair Value - Book Value Inventories Identifiable intangibles Long-term debt $ (200) 5,000 300 FIFO, sold in 2019 Straight-line, 5 years Straight-line, 2 years Goodwill recognized in the acquisition was unimpaired in 2019 but became fully impaired during 2020. The subsidiary did not declare any dividends during this period and reported no other comprehensive income. The subsidiary reported net income as follows: Year 2019 2020 2021 Net Income $1,500 5,000 2,000 7. Equity in net income (loss) for 2020, reported on the parent's books, is: a. $650 b. $4,150 c. $(350) d. $1,150 8. Equity in net income for 2021, reported on the parent's books, is: a. $1,150 b. $1,000 c. $ 850 d. $1,350

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