Question

On January 1, 2011, 100% of the outstanding stock of Sand Company was purchased by Plant Corporation for $3,200,000. At that time, the book value of Sand’s net assets equaled $3,000,000. The excess was attributable to equipment with a 10-year life. The following trial balances of Plant Corporation and Sand Company were prepared on December 31, 2011:
Throughout 2011, sales to Plant Corporation made up 40% of Sand’s revenue and produced a 25% gross profit rate. At year-end, Plant Corporation had sold $250,000 of the goods purchased from Sand Company and still owed Sand $30,000. None of the Sand products were in Plant’s January 1, 2011, beginning inventory.
Required
Prepare the worksheet necessary to produce the consolidated income statement and balance sheet of Plant Corporation and its subsidiary for the year ended December 31, 2011. Include the determination and distribution of excess schedule.


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  • CreatedApril 13, 2015
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