Panther Company acquires an 80% interest in Sargo Company for $272,000 in cash on January 1, 2011, when Sargo Company has the following balance sheet:

The excess of the price paid over book value is attributable to the fixed assets, which have a fair value of $260,000, and to goodwill. The fixed assets have a 10-year remaining life. Panther Company uses the simple equity method to record its investment in Sargo Company.
The following trial balances of the two companies are prepared on December 31, 2011:

1. Prepare a determination and distribution of excess schedule (a value analysis is not needed) for the investment.
2. Prepare all the eliminations and adjustments that would be made on the 2011 consolidated worksheet.
3. Prepare the 2011 consolidated income statement and its related income distribution schedules.
4. Prepare the 2011 statement of retained earnings.
5. Prepare the 2011 consolidated balance sheet.

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Assets Liabilities and Equity $50,000 100,000 150,000 $100,000 Currentliabilities Current assets Depreciable ixed assels (net)2 200,000 Common stock($10p... Retained earnings.... Total liabilities and equity Total assets. $300,000 $300,000 Panther Sargo Current Assets Depreciable Fixed Assels Accumulated Depreciation Investment in Sargo Company... Current Liabilities.. Common Stock ($10 par 38,000 400,000 130,000 200,000 000 20,000) 288,000 (60,000 40,000) (300,000 100,000) (200,000 150,000) 50,000 100,000 75,000 Sales 110,000 20,000) xpenses Subsidiary Income.... Dividends Declared. Totals.. 5,000