Chapter SA2, Problem SA2.1.1P

Problem SA2-1 Consolidate balance sheet, date control is achieved The Primary

Company and the VIE Company had the following balance sheet on December 31, 2015, the date control was achieved:

The Primary Company guaranteed the 5% bond payable issued by the VIE Company. The Primary Company also loaned the VIE Company $300,000 on a subordinated note at 10% annual interest.

The fair value of the VIE Company's equity is $170,000. Equipment, with a 5 year life has a value $50,000 greater than book value.

Prepare a determination and determination of excess schedule.