Peanut Salt Company Company Income Statement: Net Sales ..... Cost of Goods Sold . $ (600,000) $(315,000) 350,000 150,000 150,000 Operating Expenses Subsidiary Income. Net Income... 60,000 (84,000) $ (184,000) $(105,000) Retained Earnings Statement: Balance, January 1, 2016... Net Income (from above). Dividends Declared..... Balance, December 31, 2016... $ (320,000) $(150,000) (184,000) 60,000 (105,000) 20,000 $ (444,000) $(235,000) Consolidated Balance Sheet: Inventory, December 31 .... Other Current Assets ... Investment in Salt Company.. Other Long-Term Investments. Land...... $ 130,000 $ 50,000 241,000 308,000 20,000 140,000 235,000 80,000 Building and Equipment. Accumulated Depreciation Other Intangible Assets Current Liabilities... Bonds Payable.... Other Long-Term Liabilities. . Common Stock...... Paid-in Capital in Excess of Par Retained Earnings, December 31, 2016. Totals .... 375,000 200,000 (120,000) (30,000) 20,000 (70,000) (100,000) (50,000) (50,000) (50,000) (235,000) (150,000) (200,000) (200,000) (100,000) (444,000) 2$
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, which included
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
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 condensed statements were prepared for the Peanut and Salt companies for December 31, 2016. (attached)
Complete the worksheet for consolidated financial statements for the year ended December 31, 2016. Include any necessary determination and distribution of excess schedule and income distribution schedules.
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