Complete the worksheet for consolidated financial statements for the year ended December 31, 2016. Include the value analysis schedule, amortization, necessary determination and distribution of excess schedule and income distribution schedules.
On January 1, 2015, Peanut Company acquired 80% of the common stock of
Salt Company for $200,000. On this date, Salt had total owners’ equity of $200,000 (including
investment in Salt using the simple equity method.
Any excess of cost over book value is attributable to inventory (worth $12,500 more than
cost), to equipment (worth $25,000 more than book value), and to
inventories. The equipment has a remaining life of four years, and straight-line
used. On January 1, 2016, Peanut held merchandise acquired from Salt for $20,000. During
2016, Salt sold merchandise to Peanut for $40,000, $10,000 of which was still held by Peanut
on December 31, 2016. Salt’s usual gross profit is 50%.
On January 1, 2015, Peanut sold equipment to Salt at a gain of $15,000. Depreciation is
being computed using the straight-line method, a 5-year life, and no salvage value.
The following
31, 2016:
Peanut Company Salt Company
Inventory, December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,000 50,000
Other Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241,000 235,000
Investment in Salt Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308,000
Other Long-Term Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000 80,000
Buildings and Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375,000 200,000
Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (120,000) (30,000)
Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Current Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (150,000) (70,000)
Bonds Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (100,000)
Other Long-Term Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (200,000) (50,000)
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (200,000) (50,000)
Paid-In Capital in Excess of Par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (100,000) (50,000)
Retained Earnings, January 1, 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (320,000) (150,000)
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (600,000) (315,000)
Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000 150,000
Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000 60,000
Subsidiary Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (84,000)
Dividends Declared. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000 20,000
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Complete the worksheet for consolidated financial statements for the year ended
December 31, 2016. Include the value analysis schedule, amortization, necessary determination and distribution of excess schedule and income distribution schedules.
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