Poco Company purchased 80% of Solo Company's common stock on January 1, 2012 for $250,000. On December 31, 2012, the companies prepared the following trial balances: Prepare a consolidated workpaper using equity method.

Required:

Prepare a consolidated statements workpaper on December 31, 2012. Any difference between book value and the value implied by the purchase price relates to goodwill. Can you please provide the formula to attain the goodwill?

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Cash Inventory Investment in Solo Company Land Cost of Goods Sold Other Expense Dividends Declared Total Debits Accounts Payable Common Stock Other Contributed Capital Retained Earnings, 1/1 Sales Equity in Subsidiary Income Total Credits Poco $ 161,500 210,000 402,000 75,000 410,000 100,000 30,000 $1,388,500 $ 154,500 200,000 60,000 50,000 760,000 164,000 $1,388,500 Solo $125,000 195,000 -0 150,000 125,000 80,000 15,000 $690,000 $ 35,000 150,000 35,000 60,000 410,000 $690,000 Cash Inventory Investment in Solo Company Land Cost of Goods Sold Other Expense Dividends Declared Total Debits Accounts Payable Common Stock Other Contributed Capital Retained Earnings, 1/1 Sales Equity in Subsidiary Income Total Credits Poco $ 161,500 210,000 402,000 75,000 410,000 100,000 30,000 $1,388,500 $ 154,500 200,000 60,000 50,000 760,000 164,000 $1,388,500 Solo $125,000 195,000 -0 150,000 125,000 80,000 15,000 $690,000 $ 35,000 150,000 35,000 60,000 410,000 $690,000

Answer rating: 100% (QA)

Required solution Poco Company and Subsidiary Consolidated Statements Workpaper For the Year Ended D... View the full answer