Sym Corporation a wholly owned subsidiary of Paratec Corporation leased
Sym Corporation, a wholly owned subsidiary of Paratec Corporation, leased equipment from its parent company on August 1, 2016. The terms of the agreement clearly do not require the lease to be accounted for as a capital lease. Both entities are accounting for the lease as an operating lease. The lease payment is $12,000 per year, paid in advance each August 1.
Paratec purchased its investment in Sym on December 31, 2011, when Sym had a retained earnings balance of $150,000. Paratec is accounting for its investment in Sym under the cost method. Included in the original purchase price was a $50,000 premium attributable to Sym’s history of exceptional earnings.
The December 31, 2018, trial balances of Paratec and its subsidiary are presented below.
Prepare the worksheet necessary to produce the consolidated income statement and balance sheet of Paratec Corporation and its subsidiary for the year ended December 31, 2018.
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