Marsha Corporation purchases an 80% interest in the common stock of Transam Corporation on December 31, 2013, for $720,000, when Transam has the following condensed balance sheet:

On the December 31, 2013, purchase date, the dividends on the preferred stock are two years in arrears. Also on this date, the book values of Transam€™s assets approximate fair values, except for the building which is undervalued by $28,000 and has a 20-year remaining life. Any remaining excess is considered to be goodwill.
For 2014€“2016, earnings and dividends for Transam Corporation are as follows:

On January 1, 2015, Marsha sells production equipment to Transam for $55,000 with a 5-year remaining life. Marsha€™s original cost is $80,000, and accumulated depreciation on the date sold is $50,000.
Required
Prepare the worksheet necessary to produce the consolidated financial statements of Marsha Corporation and its subsidiary as of December 31, 2016. Include the determination and distribution of excess and income distribution schedules.

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Assets Liabilities and Stockholders' Equity 500,000 100,000 Liabilities 600,000 Preferred stock (8% cumulative, $100 par) . ..100,000 Building (net) . . . Equipment (net). . . 750,000 50,000 $1,500,000 Total liabilities and equily$1,500,000 Preferred Dividends Common Dividends Income 2014 2015 2016 $40,000 50,000 80,000 $16,000 24,000 $26,750 Marsha Transam Corporation Corporation 806,400 720,000 400,000 950,000 463,250 210,000 500,000 (200,000 (160,000) 740,000 (200,000) (800,000) (550,000) (100,000) 1,500,000 (400,000) 2 Preferred Stock, 8% (860,000) 124,000) (21,400) 600,000 320,000 50,750 Other Expenses 650,000 200,000 0 Totals