CASH

Parent's cash ($100,000) plus Sub's cash ($50,000) = $150,000

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TRADING SECURITIES

Parent's trading securities ($70,000) = $70,000

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ACCOUNTS RECEIVABLE

Parent's accounts receivable ($80,000) plus Sub's accounts receivable ($30,000) = $110,000

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INVENTORY

Parent's inventory ($200,000) plus Sub's inventory ($20,000) = $220,000

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LAND

Parent's land ($25,000) plus Sub's land ($75,000 + $35,000 adjustment to fair value) = $135,000

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BUILDINGS AND EQUIPMENT

Parent's building and equipment ($100,000) plus Sub's building and equipment ($275,000) = $375,000

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PATENT

Parent's patent ($225,000) = $225,000

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GOODWILL

Amount arising from acquisition  = $65,000

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ACCOUNTS PAYABLE

Parent's accounts payable ($80,000) plus Sub's accounts payable ($80,000) = $160,000

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SALARIES PAYABLE

Parent's salaries payable ($10,000) plus Sub's accounts payable ($20,000) = $30,000

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INTEREST PAYABLE

Parent's interest payable ($10,000) = $10,000

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NOTES PAYABLE

Parent's notes payable ($190,000) plus Sub's notes payable ($50,000) = $240,000

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MORTGAGE LIABILITY

Parent's mortgage liability ($110,000) = $110,000

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CAPITAL STOCK

Parent's capital stock only ($300,000) = $300,000

Note that the Sub's capital stock is not reported in the consolidated statement; the statement is intended for the use by Parent shareholders, and we are attempting to report their equity interest to them.  This equity implicitly embodies the ownership of all the parent's net assets, including those held through subsidiary companies.

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RETAINED EARNINGS

Parent's retained earnings ($500,000) = $500,000

Note that the consolidated retained earnings cannot include any amounts from the sub prior to the date of acquisition -- one buys "assets" not "earnings" -- hopefully those "assets" can be expected to produce future earnings (but past earnings of an acquired sub are not rolled into the parent's retained earnings account.

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