Question: Perkins Company acquired 100 of Schultz Company on January 1

Perkins Company acquired 100% of Schultz Company on January 1, 2010, for $161,500. On December 31, 2010, the companies prepared the following trial balances:

A. What method is being used by Perkins to account for its investment in Schultz Company? How can you tell?
B. Prepare a workpaper for the preparation of consolidated financial statements on December 31, 2010. Any difference between the book value of equity acquired and the value implied by the purchase price relates togoodwill.
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  • CreatedMarch 13, 2015
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