Reference no: EM133016251

Question - Parent acquired 100% of Sub Inc on January 1, 2019. Unfortunately due to some computer failures, the original consideration paid was not available. You were requested to calculate this. In order to complete this, you were provided with the following information:

The value of the Investment in Sub Account as of December 31 2020 was $228,500.

In 2019 Sub's net income after tax was $71,000

In 2019 Sub declared a dividend of $10,000

In 2020, Sub suffered a net income loss of $16,000

In 2020, Sub declared a dividend of $8,000

Goodwill on the date of acquisition was $70,000

In 2020, there was a goodwill impairment of 10%

You were also advised that all acquisition differential on the date of acquisition was attributable to Goodwill, with the exception of inventory. You were able to determine that the fair value of inventory exceeded book value by $1,000 on the date of acquisition. All of this inventory was sold to outsiders during 2019.

Required - Calculate the balance of the Investment in Sub account on the date of acquisition.