Below you will find the trial balance for Parent Company and its wholly owned purchase,

Below you will find the trial balance for Parent Company and its wholly owned purchase,

owned purchase, Subsidiary Company, as of December 31, 2012. The financial statements are denominated in British pounds.
Company	Parent	Company	Subsidiary	Company
Accounts	Debit	Credit	Debit	Credit
Cash	£10,000		£4,000				1. Subsidiary Company’s assets and liabilities are all shown at fair value except for:
Accounts Receivable	25,000		10,000				a. The fair value of Inventory is 32,000.
Inventory	30,000		12,000				b. The fair value of Depreciable Assets is 370,000.
Short-Term Investments	40,000		6,000				2. Subsidiary company sold Parent Company an item that is in Parent Company’s inventory for 10,000 and cost Subsidiary Company 5,000. The sale was made to Parent Company on credit, and no payment has been made.
Prepaid Assets	35,000		12,000				3. On December 27, 2012, Parent Company made a long-term loan to Subsidiary Company in the amount of 100,000.
Investment in Subsidiary	290,000						4. Subsidiary Company paid Parent Company 7,000 for Consulting Services. Subsidiary Company considers this an Administrative Expense, and Parent Company considers it Sales Revenue.
Long-Term Notes Receivable	150,000		14,000				5. Exchange rates are:
Debt Service Fund	50,000						March 31, 2012, Exchange Rate:
Depreciable Assets	900,000		350,000				Average Rate for 2012:
Accumulated Depreciation		£200,000		£50,000			December 31, 2012, Exchange Rate:
Intangible Assets	45,000		20,000
Current Liabilities		92,000		44,000			For Milestone One, submit the initial Excel model for the report that shows the consolidation of entries and the final income statement and balance sheet.
Long-Term Notes Payable		225,000		119,000
Common Stock		400,000		200,000
Retained Earnings		482,000		50,000
Sales Revenue		750,000		245,000
Cost of Goods Sold	330,000		160,000
Selling Expenses	100,000		45,000
Administrative Expenses	120,000		70,000
Interest Expenses	24,000		5,000

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