Parrot Inc. acquired an 85% interest in Sparrow Corporation on January 2, 2014 for $42,500 cash when Sparrow had Capital Stock of $15,000 and Retained Earnings of $25,000. Sparrow's assets and liabilities had book values equal to their fair values except for inventory that was undervalued by $2,000. Balance sheets for Parrot and Sparrow on January 2, 2014, immediately after the business combination, are presented in the first two columns of the consolidated balance sheet working papers.
Required:
Complete the consolidation balance sheet working papers for Parrot and subsidiary at January 1, 2014.
Definitions:
Systems Perspective
An approach to analysis that considers the interconnectedness and interactions between the components of a system.
Strategic Decisions
Choices made by an organization's management that have long-term implications and are crucial for achieving overarching goals.
Succession Planning
The process of identifying and developing new leaders who can replace old leaders when they leave, retire, or pass away.
Self-awareness
The ability to reflect on and accurately assess one's own behaviors, attitudes, and impacts on others.
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