Paque Corporation owns 90 of the common stock of Segal
Paque Corporation owns 90% of the common stock of Segal Company. The stock was purchased for $810,000 on January 1, 2009, when Segal Company’s retained earnings were $150,000. Financial data for 2013 are presented here:

The January 1, 2013, inventory of Paque Corporation includes $45,000 of profit recorded by Segal Company on 2012 sales. During 2013, Segal Company made intercompany sales of $300,000 with a markup of 20% of selling price. The ending inventory of Paque Cor- poration includes goods purchased in 2013 from Segal Company for $75,000. Paque Corpo- ration uses the partial equity method to record its investment in Segal Company.

A. Prepare the consolidated statements workpaper for the year ended December 31, 2013.
B. Calculate consolidated retained earnings on December 31, 2013, using the analytical or t-account approach.

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