Refer to the preceding facts for Presss acquisition of Simon common stock. Press uses the simple equity

Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2012, Press held merchandise acquired from Simon for $10,000. During 2012, Simon sold $40,000 worth of merchandise to Press.

Press held $12,000 of this merchandise at December 31, 2012. Press owed Simon $6,000 on December 31 as a result of this intercompany sale. Simon has a gross profit rate of 25%. On January1, 2012, Simon signed a 5-yearlease with Press for the rental of equipment, which has a 5-year life. Payments of $23,363 are due each January 1, and there is a guaranteed residual value of $10,000 at the end of the five years. The market value of the equipment at the inception of the lease was $100,000. The cost of the equipment to Press was $85,000. Press has a 12% implicit rate on the lease. The amortization table shown on page 381 was prepared for the lease.

Press and Simon had the following trial balances on December 31, 2012:

Required
Prepare the worksheet necessary to produce the consolidated financial statements for Press Company and its subsidiary Simon Company for the year ended December 31, 2012. Include the determination and distribution of excess and income distribution schedules.

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Simon Company Balance Sheet January 1, 2011 Assets Liabilities and Equi Accounts receivable$40,000 Accounts payable . . . $80,000 10,000 190,000 190,000 60,000 Common stock ($1 par). . . _ . . . 100,000 P . . Land aid-in capital in excess of par Accumulated depreciation (200,000) 100,000 (30,000) Accumulated depreciation . Payment $23,363 23,363 23,363 23,363 23,363 10,000 eriod Interest Princ Balance Jan. 1, 2012 Jan. 1, 2013 Jan. 1,2014 Jan. 1, 201.5 Jan. 1, 2016 Jan. 1, 2017 $9,196 7,496 5,592 3,460 1,071 $(23,363) (14,167) (15,867) (17,771) (19,903) (8,929 $76,637 62,470 46,603 28,832 8,929 0 Press Simon Compan Compan 72,363 72,000 120,000 73,637 45,000 56,000 100,000 100,000 as Land 506,643 103,452 (17,619) Buildings. . .. 800,000 400,000 (220,000 (220,000) . 150,000100,000 (90,000)(50,000) 100,000 (18,000) (60,000) (40,000) 76,637) (9,196) . (100,000] (10,000) Equipment-Capital Lease.. Accrued Interest Capital Lease Common Stock . . . . . . . . . . . . . . . Sales Cost of Goods Sold. Depreciation Expense-Buildings (800,000) (400,000) 465,000 240,000 10,000 28,000 72,000 9,196 30,000 15,000 140,000 Other Expenses (9,196) (15,000] (32,643) 20,000 0 Dividends Declared 10,000 0