Kraus Company has the following balance sheet on July 1, 2012:

On July 1, 2012, Neiman Company purchases 80% of the outstanding common stock of Kraus Company for $310,000. Any excess of book value over cost is attributed to the equipment, which has an estimated 5-yearlife. Kraus Company closes its books before the acquisition on July 1. On December 31, 2012, Neiman Company and Kraus Company prepare the following trial balances:

1. Prepare a determination and distribution of excess schedule for the investment (a value analysis is not needed).
2. Prepare all the eliminations and adjustments that would be made on the December 31, 2012, consolidated worksheet.
3. Prepare the 2012 consolidated income statement and its related income distribution schedules.

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Assets Liabilities and Equity $200,000 300,000 $500,000 Currentliabilities. . Common stock ($10 par) . . _ . . _ .- .$100,000 100,000 300,000 $500,000 Current assets Equipment (net) Retained earnings Toal labilities and equity Total assets. Kraus (uly 1-Dec. 31) 220,000 300,000 Neiman 220,000 500,000 Current Assets.. Equipmen Accumulated Depreciation-Equipment. Investment in Kraus Company Current Liabilities Common Stock ($10 par) . . Retained Earnings, July 1, 2012. Sales Cost of Goods Sold General Expenses 40,000 (20,000 310,000 200,000 70,000 200,00 (100,000l 430,000 300,000) 00,00 (100,000l 180,000 60,000 45,000 25,000 Totals . .