can easily compare the entries. January 1, 20X1, Peres Company purchased 80% of the common stock...

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can easily compare the entries. January 1, 20X1, Peres Company purchased 80% of the common stock of Soil Comt.O $308,000. On this date, Soll had common stock, other paid-in capital, and retained caany for Soll Company were as follows: 20X1 20X2 $60,000 20,000 $90,000 30,000 Net income .. Dividends. On January 1, 20X1, the only tangible assets of Soll that were undervalued were inventon and the building. Inventory, for which FIFO is used, was worth $10,000 more than cost. The inventory was sold in 20X1. The building, which is worth $25,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributable to goodwill. 1. Using this information or the information in the following trial balances, prepare a determi- pation and distribution of excess schedule. 2. Peres Company carries the investment in Soll Company under the simple equity method. In general journal form, record the entries that would be made to apply the equity method in 20X1 and 20X2. 3. Compute the balance that should appear in Investment in Soll Company and in Soll Income on December 31, 20X2 (the second year). Fill in these amounts on Peres Company's trial balance for 20X2. 4. Complete a worksheet for consolidated financial statements for 20X2. Include columns for eliminations and adjustments, consolidated income. NCI, controlling retained earnings. and balance sheet. Peres Sll Company Company Inventory, December 31 Other Current Assets Investment in Soll Company 100,000 148,000 Note 1 50,000 180,000 50,000 350,000 (100,000) 50,000 320,000 (60,000) Land Buildings and Equipment. Accumulated Depreciation ..... Goodwill Other Intangibles.. Current Liabilities.. Bonds Payable. Other Long-Term Liabilities 20,000 (40,000) (100,000) (120,000) ..... (200,000) (200,000) (100,000) (214,000) Common Stock, PCompany Other Paidin Capital, P Company Retained Earnings, P Company. Common Stock, SCompany. Other Paid-in Capital, S Company Retained Earnings, S Company. (50,000) (100,000) (190,000) 1520,000) 300,000 120,000 (450,000) 260,000 100,000 ..... Net Sales... Cost of Goods Sold. Operating Expenses Note 1 Soll Income 50,000 Dividends Declared, P Company Dividends Declared, S Company 30,000 can easily compare the entries. January 1, 20X1, Peres Company purchased 80% of the common stock of Soil Comt.O $308,000. On this date, Soll had common stock, other paid-in capital, and retained caany for Soll Company were as follows: 20X1 20X2 $60,000 20,000 $90,000 30,000 Net income .. Dividends. On January 1, 20X1, the only tangible assets of Soll that were undervalued were inventon and the building. Inventory, for which FIFO is used, was worth $10,000 more than cost. The inventory was sold in 20X1. The building, which is worth $25,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributable to goodwill. 1. Using this information or the information in the following trial balances, prepare a determi- pation and distribution of excess schedule. 2. Peres Company carries the investment in Soll Company under the simple equity method. In general journal form, record the entries that would be made to apply the equity method in 20X1 and 20X2. 3. Compute the balance that should appear in Investment in Soll Company and in Soll Income on December 31, 20X2 (the second year). Fill in these amounts on Peres Company's trial balance for 20X2. 4. Complete a worksheet for consolidated financial statements for 20X2. Include columns for eliminations and adjustments, consolidated income. NCI, controlling retained earnings. and balance sheet. Peres Sll Company Company Inventory, December 31 Other Current Assets Investment in Soll Company 100,000 148,000 Note 1 50,000 180,000 50,000 350,000 (100,000) 50,000 320,000 (60,000) Land Buildings and Equipment. Accumulated Depreciation ..... Goodwill Other Intangibles.. Current Liabilities.. Bonds Payable. Other Long-Term Liabilities 20,000 (40,000) (100,000) (120,000) ..... (200,000) (200,000) (100,000) (214,000) Common Stock, PCompany Other Paidin Capital, P Company Retained Earnings, P Company. Common Stock, SCompany. Other Paid-in Capital, S Company Retained Earnings, S Company. (50,000) (100,000) (190,000) 1520,000) 300,000 120,000 (450,000) 260,000 100,000 ..... Net Sales... Cost of Goods Sold. Operating Expenses Note 1 Soll Income 50,000 Dividends Declared, P Company Dividends Declared, S Company 30,000

Answer rating: 100% (QA)

Jan 1 20X1 Assets of Subsidiary Amt Common stock 40000 Other paid in capital Retained Earning 190000 ... View the full answer