Parent acquired Subsidiary on January 1, 20X5 at a price $225,000 in excess of book value. Of that excess, $125,000 was allocated to an unrecorded Customer List with a 10-year life, $50,000 to an unrecorded Patent with a 5-year service life and the remainder to Goodwill.

On January 1 20X7, Subsidiary sold equipment to Parent for $210,000. The equipment had a cost of $300,000 and accumulated depreciation of $120,000. The remaining life of the equipment was estimated at 6 years. Financial statements for the two companies for the year ended December 31, 20X8 are presented below.

I cannot find where I am going wrong with this a part and could use some assistance with a break down.

Thank you!

Sales revenue Cost of goods sold Gross profit Operating expenses Equity income Net Income Parent 5, 127,800.00 2,598,000.00 2,529,800.00 986,500.00 134, 100.00 1,677,400.00 Subsidiary 745,900.00 436,900.00 309,000.00 157,400.00 151,600.00 Retained Earnings, 1/1/X8 Net income Dividends Retained Earnings, 12/31/X8 3,158, 100.00 1,677,400.00 275,000.00 4,560,500.00 389,700.00 151,600.00 52,000.00 489,300.00 Cash and receivables Inventory Equity investment Property, plant & equipment (Net) Total Assets 1,084,980.00 682,500.00 875,900.00 409,700.00 1,054,300.00 8,696,800.00 2,184,700.00 11,711,980.00 3,276,900.00 Accounts payable Accrued liabilities Notes payable Common stock Additional paid-in capital Retained Earnings, 12/31/X8 Total Liabilities and Equities 1,259,780.00 589,700.00 536,700.00 547,900.00 2,500,000.00 1,200,000.00 275,000.00 155,000.00 2,580,000.00 295,000.00 4,560,500.00 489,300.00 11, 711,980.00 3,276,900.00 c. Prepare the consolidating Worksheet Consolidating Entries Debit Parent Subsidiary Credit Total 5,873,700 Sales revenue 5,127,800.00 745,900.00 Document last modified: October 28 000.00 436,900.00 (3,034,900) 2,529,800.00 309,000.00 2,838,800 986,500.00 157,400.00 D 17,500 1,161,400 Gross profit Operating expenses Equity income Net Income C134,100 0 134,100.00 1,677,400.00 151,600.00 1,677,400 Retained Earnings, 1/1/X8 3,158,100.00 389,700.00 E389,700 3,158,100 Net income 1,677,400.00 151,600.00 1,677,400 Dividends 52,000 275,000 275,000.00 52,000.00 4,560,500.00 489,300.00 Retained Earnings, 12/31/X8 4,560,500 Cash and receivables 1,084,980.00 682,500.00 1,767,480 Inventory 875,900.00 409,700.00 1,285,600 Equity investment 1,054,300.00 I 25,000 0 E A 837,700 82,100 157,500 8,696,800.00 2.184,700.00 Property, plant & equipment (Net) Patent Goodwill 1 D 25,000 17,500 A 50,000 A 50,000 10,856,500 32,500 50,000 Total Assets 11,711,980.00 3,276,900.00 13,992,080 Accounts payable 1,259,780.00 589,700.00 1,847,480 Accrued liabilities 536,700.00 547 900.00 1,084,600 2,500,000.00 1,200,000.00 3,700,000 275,000.00 155,000.00 E 155,000 275,000 Notes payable Common stock Additional paid-in capital Retained Earnings, 12/31/X8 2,580,000.00 295,000.00 E295,000 2,580,000 4,560,500.00 489,300.00 4,560,000 Total Liabilities and Equities 11,711,980.00 3,276,900.00 14,047,080 Sales revenue Cost of goods sold Gross profit Operating expenses Equity income Net Income Parent 5, 127,800.00 2,598,000.00 2,529,800.00 986,500.00 134, 100.00 1,677,400.00 Subsidiary 745,900.00 436,900.00 309,000.00 157,400.00 151,600.00 Retained Earnings, 1/1/X8 Net income Dividends Retained Earnings, 12/31/X8 3,158, 100.00 1,677,400.00 275,000.00 4,560,500.00 389,700.00 151,600.00 52,000.00 489,300.00 Cash and receivables Inventory Equity investment Property, plant & equipment (Net) Total Assets 1,084,980.00 682,500.00 875,900.00 409,700.00 1,054,300.00 8,696,800.00 2,184,700.00 11,711,980.00 3,276,900.00 Accounts payable Accrued liabilities Notes payable Common stock Additional paid-in capital Retained Earnings, 12/31/X8 Total Liabilities and Equities 1,259,780.00 589,700.00 536,700.00 547,900.00 2,500,000.00 1,200,000.00 275,000.00 155,000.00 2,580,000.00 295,000.00 4,560,500.00 489,300.00 11, 711,980.00 3,276,900.00 c. Prepare the consolidating Worksheet Consolidating Entries Debit Parent Subsidiary Credit Total 5,873,700 Sales revenue 5,127,800.00 745,900.00 Document last modified: October 28 000.00 436,900.00 (3,034,900) 2,529,800.00 309,000.00 2,838,800 986,500.00 157,400.00 D 17,500 1,161,400 Gross profit Operating expenses Equity income Net Income C134,100 0 134,100.00 1,677,400.00 151,600.00 1,677,400 Retained Earnings, 1/1/X8 3,158,100.00 389,700.00 E389,700 3,158,100 Net income 1,677,400.00 151,600.00 1,677,400 Dividends 52,000 275,000 275,000.00 52,000.00 4,560,500.00 489,300.00 Retained Earnings, 12/31/X8 4,560,500 Cash and receivables 1,084,980.00 682,500.00 1,767,480 Inventory 875,900.00 409,700.00 1,285,600 Equity investment 1,054,300.00 I 25,000 0 E A 837,700 82,100 157,500 8,696,800.00 2.184,700.00 Property, plant & equipment (Net) Patent Goodwill 1 D 25,000 17,500 A 50,000 A 50,000 10,856,500 32,500 50,000 Total Assets 11,711,980.00 3,276,900.00 13,992,080 Accounts payable 1,259,780.00 589,700.00 1,847,480 Accrued liabilities 536,700.00 547 900.00 1,084,600 2,500,000.00 1,200,000.00 3,700,000 275,000.00 155,000.00 E 155,000 275,000 Notes payable Common stock Additional paid-in capital Retained Earnings, 12/31/X8 2,580,000.00 295,000.00 E295,000 2,580,000 4,560,500.00 489,300.00 4,560,000 Total Liabilities and Equities 11,711,980.00 3,276,900.00 14,047,080