Translate a trial balance and prepare a consolidation worksheet with excess of cost over book value traceable to equipment. Due to increasing pressures to expand globally, Pueblo Corporation acquired a 100% interest in Sorenson Company, a foreign company, on January 1, 2016. Pueblo paid 12,000,000 FC, and Sorenson€™s equity consisted of the following:
Common stock.. .. .. ... .... .. . . .. . .. .... .. .. .. . .. . . ... 3,000,000 FC
Paid-in capital in excess of par .. .. . . . .. .. .... .. ... . . .. . 2,000,000
Retained earnings ... .. . .. .. .. . . . . . .. .... .. .... . .. . . . 4,200,000
Total... . .. . . . . .. .... . .. . . . . .. ... .. .. .... .. . . . . . .. ... 9,200,000 FC
On the date of acquisition, equipment with a 10-year life was undervalued by 500,000 FC. Any remaining excess of cost over book value is attributable to additional equipment with a 20-year life.
The trial balances for Pueblo and Sorenson as of December 31, 2018, are as follows:

The investment in Sorenson consists of the following:
Initial investment (12,000,000 FC X $1.20) .. .. . . . . . .. .. . . . $14,400,000
2016Income (1,750,000 FC X $1.28).. .... .. . . . . . .. . . . . ... 2,240,000
2017Income (2,000,000 FC X $1.30).. .... .. . . . . . .. . . . . ... 2,600,000
2018Income. .. .. .. . .. .... .. .. ... .. . . . . .. . . . . . .. .... . .... 1,729,000
Total.. .. .. .... .. . .. .. .. .... ... .. . . .. . . . . . . . .. .. .. ...... $20,969,000
Relevant exchange rates are as follows:
1FC =
January 1,2016 .... ... .. .. .. . . . . . . $1.20
2016Average.. .... . .. .... .. . . . . . . 1.28
January 1,2017 .... ... .. .. .. . . . . . . 1.25
2017Average.. .... . .. .... .. . . . . . . 1.30
December 31,2018.. .. .. .... .. . . . . 1.31
2018Average.. .... . .. .... .. . . . . . . 1.33
Required
Assuming the FC is Sorenson€™s functional currency, prepare a consolidated worksheet.

Transcribed Image Text:

Pueblo Corporatio renson Compan 4,050,000 5,270,000 5,540,000 20,969,000 21,000,000 (12,560,000) (3,450,000) (10,000,000) (4,000,000) (6,500,000) (12,180,000) (26,000,000) 16,380,000 3,210,000 (1,729,000) ash Accounts Receivable Inventory . Investment in Sorenson 2,840,000 FC 3,990,000 5,800,000 .. . 15,000,000 (6,800,000) (1,580,000) (5,000,000) (3,000,000) 2,000,000) (7,950,000) ssets. . epreciation counts Payable Long-Term Debt Common Stock Paid-In Capital in Excess of Par Retained Earnings, Januaryl, 2018 Sales Cost of Goods Sold. . . _ . . _ _ _ _ . Operating Expenses Subsidiary Income . .. ···.. . . . . . . . . . . . . . (10,000,000) 7,500,000 1,200,000 . . _.. .. Totals 0 FC