On January 1, 2016, Parent Company Purchased 90% of the Common

Essay

On January 1, 2016, Parent Company purchased 90% of the common stock of Sub-A Company for $90,000.On this date, Sub-A had common stock, other paid-in capital, and retained earnings of $10,000, $20,000, and $60,000 respectively.
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On January 1, 2017, Sub-A Company purchased 80% of the common stock of Sub-B Company for $64,000.On this date, Sub-B Company had common stock, other paid-in capital, and retained earnings of $5,000, $30,000, and $40,000 respectively.
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Any excess of cost over book value on either purchase is due to a patent, to be amortized over ten years.
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Both Parent and Sub-A have accounted for their investments using the simple equity method.
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During 2017, Sub-B sold merchandise to Sub-A for $20,000, of which one-fourth is still held by Sub-B on December 31, 2017.Sub-B's usual gross profit is 40%.During 2018, Sub-B sold more goods to Sub-A for $30,000, of which $10,000 is still on hand on December 31, 2018.
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Required:
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Complete the Figure 8-9 worksheet for consolidated financial statements for 2018.
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